NBN Co Blog
Tue 24 JULComment
Record levels of online shopping in Australia
Posted on Tuesday 24 July 2012 by Dan Warne
The change is so great that PwC's John Riccio says traditional retailers may need to consider "converting under-performing stores into fulfilment centres for online channels."
Leading logistics company Schenker Australia says fast broadband through the NBN will be a key factor in ensuring efficient supply chains, with the result of cutting the cost of delivery of goods to consumers.
More than half of Australia now shops online, and total spend is growing annually at 14.1 per cent. PwC forecasts that Australians will spend $26.9 billion online each year by 2016.
Online shopping from stores overseas has jumped 20 per cent in the last year, and represents 45 per cent of Australia's online shopping spend.
The amount of money flowing off-shore -- $7.2 billion per annum -- is causing angst for Australian retailers, who are also simultaneously struggling with Australia's high capital city real estate costs, says PwC.
No surprise: price has to be right
PwC found that 55 per cent of people say lower prices is the most important reason to shop online.
The most popular online purchases are still electrical items (62%), and clothing, footwear and personal accessories (61%). The category to record the biggest jump has been food and groceries, now purchased online by 23 per cent of shoppers, compared with 17 per cent last year.
How broadband will help delivery
One of the less obvious aspects of the shift to online shopping is the importance of efficient delivery services.
Australia Post has commenced a major restructure of its business, focusing on parcel delivery with 24 hour pick-up lockers.
Delivering goods to consumers quickly is tied to the availability of fast broadband, according to logistics firm Schenker Australia.
"The fact that 20 percent of online retailers have identified logistics and delivery as the single biggest barrier is a wake-up call to everybody," says Ron Koehler, CEO of logistics company Schenker Australia.
"The NBN will be one of the key tools to dismantle those barriers and dramatically reduce delivery times and costs of goods bought online."
According to Koehler, "Faster information flow and keeping every point in the supply chain informed at any times are crucial to performance delivery."
"We have customers, handling extremely large files, containing tens of thousands of client orders worth millions in sales, that have to stop all other data processing activities in order to ensure sufficient network bandwidth when transmitting to DB Schenker."
"Powerful, high speed communications infrastructure like the NBN will help eliminate those roadblocks," he said.
"The outcomes for clients and consumers should mean cost savings throughout the supply chain network and greater efficiencies and profitability."
When we talk about speeds delivered over the National Broadband Network, we are referring to the wholesale speed to telephone and internet service providers. The speed you can achieve, and services you can use, on your individual connection will depend on many factors including the services you subscribe to, the software and communication protocols you use, quality of your equipment and connection to your home/business, the broadband plans offered by your telephone or internet provider and how it designs its network to cater for multiple users.
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