PayPal: Australian businesses are behind when it comes to shipping

Australian businesses are failing to meet consumers’ shipping expectations, according to research published today in the PayPal mCommerce Index: Trends Report.

The report exposes a significant gap between consumer demand and the shipping capability of Australian online businesses. The study found that 42 percent of Australian smartphone users say that Australian businesses are behind when it comes to shipping and a further 57 percent are deterred from shopping at a store again if shipping takes too long.

The Report also revealed that while two-thirds of online shoppers (63 percent) would definitely buy an item in their online shopping cart with next-day delivery (which drops sharply to 28 percent for 4-7-day delivery), the majority of Australian businesses have no plans or don’t intend to offer next-day delivery (54 percent). Currently, only a third of Australian businesses offer next-day delivery (33 percent), with 13 percent planning to offer next-day delivery within the next five years.

Libby Roy, Managing Director, PayPal Australia, said, “With almost half of mobile shoppers (47 percent) saying they’d return to a merchant who offered next day delivery, there’s a real opportunity for Australian retailers who get their shipping speed and price right. 

“Australian retailers are operating in a global market where free and fast shipping is now a consumer expectation. The online shopping experience doesn’t end at the checkout– product delivery is a core part of the end-to-end experience.”

The Report revealed that lengthy Australian shipping times undermine the benefits of mobile shopping, with 42 percent of Australian mobile shoppers stating slow shipping makes the convenience of online shopping redundant.

“With two online shopping giants, Alibaba and Amazon, poised to enter the Australian market, local consumers will have greater choice and online retail will be more competitive. To compete effectively, Australian businesses need to think beyond ‘units sold’ and understand their customer’s full engagement lifecycle including shipping, returns and other value-added benefits,” Roy continued.

The survey also reveals shipping is a key factor in shopping cart abandonment. Almost three-quarters of online shoppers (73 percent) have abandoned a purchase due to shipping costs being too high, and two-fifths (42 percent) have abandoned a purchase because shipping took too long. More than half of online shoppers (57 percent) expect a free shipping option, and the same proportion (57 percent) would not shop twice with a business whose delivery took too long.

“Australia has one of the highest levels of mobile penetration globally and 71 percent of Australian smartphone users shop on their mobile devices.  Yet, it seems the Australian shipping experience is making the convenience of mobile shopping redundant.

“Although online retailers may not consider shipping to be a business priority, the Trends Report demonstrates that matching the agility of mobile transactions with great delivery is critical to customer loyalty and overall business success,” said Ms Roy.  

Nearly one-third of respondents ranked groceries and food & drink as the two most important categories for next-day delivery (35 percent and 34 percent respectively). Tickets to music, movies & arts and clothing & accessories tied for third place, both prioritised by 9 percent of respondents. In comparison, there are some things we’re prepared to wait for with sporting goods and toys & games ranked as the least important for next-day delivery (1 percent respectively).