Sydney, March 18: Australia Post’s 2024 “Inside Australian Online Shopping Report” unveils a nuanced landscape of online retail in Australia, spotlighting a divergence in spending habits among different generations amidst ongoing cost-of-living challenges.
The data reveals a slight dip in overall online spending to $63.6 billion in 2023, down by 1.2 per cent from the previous year, though 9.5 million households, or 82 per cent of Australian households, engaged in online shopping, marking a 1.4 per cent year-on-year increase.
Notably, Baby Boomers ramped up their online spending by nearly $1 billion over the previous year, with an average basket size of $109, showcasing a seven per cent year-on-year increase.
This contrasts with younger generations, particularly Gen Z, who opted for more economical purchases, averaging an $80 basket size.
Millennials (Gen Y), though spending the most at $22.1 billion, saw a slight decrease in their average basket size to $95.
The report also highlighted spending trends across categories, with home and garden leading at $16 billion spent.
Varieties stores and food and liquor were the categories showing growth, indicating a consumer preference for value amidst rising costs.
Regional distinctions in online shopping growth were observed, with Western Australia, the Northern Territory, Queensland, and Tasmania leading the uptick in online shopping activities.
Gary Starr, Executive General Manager at Australia Post, emphasized the entrenchment of e-commerce as a staple in Australian retail, noting the increasing frequency of online shopping despite smaller basket sizes.
The report also credited online sales events like Black Friday for spurring a significant rise in online purchases.
Minister for Communications, Michelle Rowland, underscored the critical role of Australia Post in connecting consumers with businesses globally and highlighted government efforts to modernize postal services to keep pace with the growing e-commerce demand.
Australia Post is responding to customer expectations with innovations such as the Australia Post Metro for next-day delivery in major cities and significant investments in community-focused initiatives, aiming to modernize its operations and continue serving as a pivotal part of Australia’s e-commerce ecosystem.
Meanwhile, the Australian Competition and Consumer Commission (ACCC) has announced it has no objections to the price hike proposed by Australia Post for its reserved ordinary letter service. Scheduled for April of this year, this adjustment will see the cost of sending an ordinary small letter on the regular timetable climb by 25 per cent, from $1.20 to $1.50.
For ordinary large letters weighing up to 125 grams, the price is set to increase from $2.40 to $3.00, and for those between 125 and 250 grams, from $3.60 to $4.50.
Notably, the prices for concession stamps will remain unchanged, with each stamp costing 60 cents or $3 for five, available exclusively to eligible concession card holders. Similarly, the cost of sending seasonal greeting cards will stay fixed at 65 cents.
ACCC Commissioner Anna Brakey commented, “In our regulatory capacity, after reviewing the proposal, we found no reason to oppose Australia Post’s intended price hikes, as they appear to be based on cost recovery.”
Despite approving the increases, the ACCC has raised certain issues during its evaluation and has put forward multiple suggestions aimed at refining Australia Post’s financial planning.
These recommendations are particularly focused on future price adjustments, to ensure the costs incurred and accounted for in providing reserved letter services don’t lead to consumers overpaying for stamps.
“We are cognizant of the feedback received during our consultations, highlighting the burden this price hike could impose on consumers and businesses alike, especially considering the current cost-of-living challenges,” Brakey added.
With the average Australian mailing roughly 15 small letters annually, this price rise translates to an additional expense of $4.50 per year for consumers. The ACCC, however, acknowledges that the actual impact will vary widely among consumers, depending on the volume, size, and type of letters sent, and on whether they qualify for concession rates.
Further details can be found in the ACCC’s decision paper and Australia Post’s formal price notification.
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