Exa Newletter, Summer 09 Edition











Online Shopping Stronger Than Ever

The exchange of goods and services electronically, otherwise known as e-Commerce, has become highly popular amongst consumers. Today, more and more consumers are shopping online as the world becomes increasingly technology savvy and internet dependent. A greater number of forward thinking businesses have identified the opportunity to reach buyers in this way and are harnessing the benefits of e-Commerce for businesses and consumers by complimenting traditional sales strategies with e-Commerce.

A recent report from Nielson Research revealed that:

  • 80% of Australian internet users were making purchases online in October 2008, compared to 73% in 2007, up 7%;
  • 85% of the world’s online population (875 million) has used the Internet to make a purchase, up 40% in 2 years, and more than half of Internet users are regular online shoppers, making online purchases at least once a month; and
  • Faster internet speeds have facilitated greater use of the internet for online purchasing. 84% of Australian internet users’ homes had broadband in March 2008, up 10% in 12 months.

Internet and online shopping are rapidly growing in popularity amongst Australian consumers. According to the Bureau of Statistics, at the end of 2008, there were 7.23 million subscribers to the internet in Australia, including 1.02 million businesses/government subscribers and 6.21 million households. Australians are also the third biggest online shoppers in the world. In just three short years, online payments in Australia have grown from $10 Billion dollars to almost $35 billion, demonstrating a phenomenal increase in the procurement of e-Commerce. Approximately 90 per cent of people use the internet to search for their product or service before making a purchase. Moving forward, people searching for a product or service online will more than likely be doing so to buy. The trends in e-Commerce today are building a strong case for the importance of online sales to the future success of businesses.

This surge in e-Commerce is also driven by its benefits. Businesses benefit greatly from e-Commerce as it can:

  • Significantly reduce overheads or administration costs;
  • Streamline sales processes and systems;
  • Increase revenue;
  • Reach new markets both locally and internationally;
  • Mean greater market penetration;
  • Launch new products or services more cost-effectively;
  • Promote products or services to identifiable groups ;
  • Strengthen brand positioning;
  • Create competitive advantage; and
  • Improve business sustainability.

Consumers also benefit from e-Commerce with access to different brands or stores just a few clicks away compared to kilometres or separated by tyranny of distance, meaning:

  • Greater variety and choice;
  • Ability to compare;
  • Better prices;
  • Greater convenience shopping at any time and on any day and in the comfort of their own homes;

Efficient shopping for time poor consumers. Online shopping can measurably reduce the time it takes to shop for basic items such as groceries, clothing, books or personal care, rent a DVD, book travel arrangements, order services such as printing, gardening and even pizza!

Success Factors for e-Commerce
Internet Security

If you are considering setting up an e-Commerce website, Internet Security will be an important factor in its success. For consumers, the number one, most important consideration in purchasing online is whether or not their personal details are protected. So too, in the past, businesses were apprehensive in their decision to introduce e-Commerce to their operations, due to real or perceived risk for the business or consumer, such as fraud and security issues. The evolution of e-Commerce, however, has seen internet security controls, measures and technologies vastly improve. This has led to increased consumer confidence in e-Commerce, which is now widely recognised as a safe and convenient way to purchase goods and services, confidence that is evident when observing the emerging popularity of online banking, social networking sites and the enormous success of the online retail greats Amazon and EBAY.

There are several steps that businesses can take to make their site secure. Security software programs can have built in protection and layers of security on the site with encryption and hacker shields. This security technology should be implemented from day one of e-Commerce development. Effective internet security protects the integrity and credibility of the business, helps to create an online business that runs smoothly and efficiently, provides a satisfying shopping experience for customers, is more effective in generating sales and delivers better results and ROI.

Site Design
Another important consideration is site design. It is important to set up the best possible website initially to ensure your e-Commerce operates seamlessly. Determine all the most important features such as shopping carts, flash catalogues, interactive show rooms, product demonstrations, live feeds, payment systems and integration with offline accounting and inventory systems. Ensure that the site is easy to navigate, user friendly, appealing in image and visual design and consistent with your brand. Consider language translation for a multi-cultural target market and the type and level of automation required in the transaction process. Product Management and Content Management Systems facilitate the updating of site and product content.

The size of the business and its customer base can also have implications. For example, Qantas carefully manages the amount of users on its site at any given time to help maintain its speed and service. By limiting the number of customers purchasing flights at any one time they reduce the chance of the site crashing and decrease purchasing time for the customer, ensuring complete customer satisfaction with their experience.

Businesses need to understand that to increase their sales they must make sure that their website is informative, well organised and entertaining. Structuring the shopping experience to match customers’ expectations is important to developing positive associations and influencing repeat visits.

Business Systems
The overall objectives or goals of the company should be analysed before moving the business’ products or service online. Research, planning and setting up proper business processes in preparation are critical to the successful implementation of e-Commerce. Business systems must be in place for taking and processing orders and dispatching products. Also, organisational change must be managed while remaining within the allocated budget.

In closing, e-Commerce is an important consideration in today’s rapidly changing commercial environment. The choice to supplement traditional business with e-Commerce can greatly influence the long term sustainability of a business. With its rapidly increasing popularity e-Commerce is high on potential and a positive investment in the future of organisations.