Smartphone penetration continues to grow, but fewer Australians are buying products online, new data shows
Sensis’ 2017 eBusiness Report found that consumer sentiment is far from rosy.
The data includes material from interviews with 1,002 small and medium business proprietors and managers, 110 of whom were operating in the “health and community services” space.
Eight hundred consumers aged over the age of 18 were also interviewed.
The research found that virtually all adult Australians (99%) have a computer of some description, with smartphone penetration continuing to grow. Smartphones are now the most popular device (up four points to 82%) and another 6% plan to get one in the next year.
More than half – 56% – of Australian adults made purchases online during the previous year, spending an average of almost $3,200. But this number was a significant drop – of 15 points – from the previous year.
“Several other findings may help explain the lower incidence of e-commerce behaviour recorded this survey,” Sensis explains.
“Only 8% expressed no concern about theft or misuse of their private information and only 11% were unconcerned about the security of their credit card information. We also note that fewer people supplied personal information online in the last year (down from 41% to 32%).”
Sensis also points out that consumer sentiment has been hit by low wage growth, mortgage stress and rising energy prices, which help explain the slowdown in online sales.
Queenslanders were the most likely to prefer going into a bricks-and-mortar shop than buying products online, the study found: nine times as many Queenslanders prefer to shop the old-fashioned way.
Nationally, more than three times as many people still prefer shopping in a physical shop to an online store (60% vs 17%). The preference for a shopfront experience is even stronger among females than males (65% vs 54%).
Northern Territorians and Queenslanders were also the most likely to buy cosmetics online; nationally, 22% of consumers had done so.
An average of 23% of online purchases are made from businesses located overseas, which is the same as in 2016. This incidence was 30% in the 18-29 age group and in WA.
As for Small and Medium Businesses themselves, 90% are online, while another 8% own a computer but aren’t connected to the internet.
While 95% of SMBs use the internet for email, only 25% use email marketing to promote their business, while 40% take orders for products and services online. Forty-eight per cent use social media, while 33% use the internet to monitor the market or competitors.
Fifty-two per cent of SMBs have a website, and another 6% plan to build one within the next year; only 35% have a mobile specific or optimised site.
As for social media, 36% of SMBs update their feeds every day, while 22% do so every week. Forty-seven per cent of online SMBs use social media for business, and the most popular channel is Facebook, with 90% penetration. LinkedIn is used by 35%, 25% use Twitter and 20% Instagram.
The top three reasons SMBs adopt e-commerce are “to provide better customer service,” “to improve delivery” and “to handle customer and supplier requests”. Thirty-six per cent take order and 47% receive payments online.
Receiving payments online is highest in the ACT (52%) with Queensland one point behind. The lowest incidence for this behaviour is in the NT at 40%. Regional SMBs are also more likely to receive online payments than their metropolitan counterparts (58% to 40%).
Although many SMBs do not sell online, the average proportion of orders taken online has grown steadily in each of the last five surveys from 32% in 2013 to 45% now among businesses that take orders online.
SMBs in the Hospitality sector that took orders online reported the highest average proportion of their total orders taking place online at 62%. Those in the Manufacturing sector were next highest (60%).
At the low end are SMBs in the Health and Community Services (24%), Retail (27%) and Wholesale (29%) sectors. By location, the average proportion of internet orders taken ranges from 31% in Victoria to 54% in the NT.