8 Interesting Insights from Mary Meeker’s 2014 Internet Report with an Australian Twist

Last week, the very influential Mary Meeker released her 2014 Internet Trend Report at the Code Conference in California.

If you don’t have time to wade through the 160+ page report – here is my summary of some of the most interesting insights for marketers with an Australian take on it (where possible).

SOCIAL 

1) From social broadcasting to selective messaging
Global Messaging Services

Tech acquisitions often shed a lot of light into where things like social media are heading, so when Facebook attempted to acquire SnapChat and went on to purchase WhatsApp it became pretty clear that people were beginning to favour private communications over public social networks. In the past 12 – 18 months, we have seen the popularity of messaging apps soar as consumers seek more control over who sees a message or photograph – demonstrating a shift from broadcast type social messaging to communicating to a select few. This consumer shift will change the way brands use social media with these direct messaging services providing brands with new tools to find and build relationships with individual customers.

With recent statistics demonstrating apps like Snapchat are growing in popularity down under – with approx 10% of the online population already using the Snapchat service, it’s one Australian marketers need to watch closely and consider relevance – particularly brands operating in the youth brand space.

Not Findable Content2. Content generation growing but becoming unfindable

As consumers shift some of their focus and attention to communicating via messaging apps – there is a growing amount of unfindable content being generated which limits marketers’ ability to capture brand perceptions and sentiment as well as glean data from social on individual consumers.

MOBILE & TABLET

3. Mobile growth unabated but mobile advertising still flat
Mobile internet usage continues to grow, with mobile data rising 81% year over year and now making up 25% of total web usage. Despite the significant growth, globally mobile advertising represents just 11% of internet advertising demonstrating lots of room for growth in the years ahead.

Device Usage by CountryIn Australia, mobile internet usage trumps usage on any other device making up 33% of all minutes spent accessing the internet. In line with global trends there is significant upside and growth opportunity in mobile advertising down under with mobile internet advertising currently attracting just over $1 in every $5 spent in display, and 17% of all search advertising spend according to the IABs recent statistics.

4. Single purpose apps all the rage

Part of the success of apps like Instagram, WhatsApp and others has been attributed to their single minded purpose. We are seeing tech giants globally begin to invest in single purpose apps i.e. Facebook Messenger to ensure important features that drive usage and interaction are not buried under a mound of functionality.

Mobile Phone Sensors Stats5. Rapid growth in sensors drives innovation & big data

The rising growth in mobile handsets shipped with sensors will pave the way for the next generation of mobile experiences – as the increasing number of sensors embedded into mobile devices provides an opportunity to create new / more engaging experiences. Equally the growth in sensors is also anticipated to create troves of additional data to mine, contributing to the big data mind-field.

6. Tablet continues to power ahead

The growth of table, seems to continue to roll on growing 52% in 2013, and uptake has grown faster than PCs ever did however penetration globally remains low. The low levels of penetration and high levels of growth indicate there is still significant upside for tablet growth in the years ahead. Locally however it is quite a different story. According to Telstye, sales of tablets in Australia reached 4.8 million in 2013, and it is now estimated that tablet penetration stands at 40%. Telsyte estimates that 29 per cent of units sold in 2013 were Low (<$200) or Medium ($200 – $450) cost, and anticipates these segments to grow to over 50 per cent of sales by 2018, given current trends – which demonstrates Apple share will soften in the coming years in Australia.

TV

TV Channels7. The evolution of TV a key space to watch

A solid portion of the report focussed on the evolution of TV – which demonstrates the significant amount of change occurring in the space.

Some of the key trends include;
• Traditional TV is being replaced with mobile apps as broadcasters seek to provide consumers with new ways to consume content on the go
• Millennial’s are leading the charge in online TV consumption shunning traditional TV viewing.
• The growth of new premium channels on YouTube can’t be ignored providing consumers with more choice – much of which is being consumed via mobile (approx 40%)

ECOMMERCE

Same-day Delivery Online Shopping8. Instant gratification drives same day delivery

As free shipping moves towards the norm globally, with approx 47% of online transactions coming from free shipping – the next big horizon is same day delivery to satisfy consumers need for instant gratification. As geographical constraints have led to slower adoption of free delivery by retailers in Australia (due to cost), it is anticipated that same day local delivery will fail to become the norm locally for quite a number of years yet as logistics prove too difficult for most retailers to master.

To view the full report click here

 

Watch: Takeaways from Mary Meeker’s Internet Trends report 2014

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Online Retailing – Unfashionable Down Under

About a year ago I first broached the topic of the lack of digital investment by Australian retailers, and 1 year on it seems whilst we have progressed we are still falling further behind the digital 8 ball. This trend seems to ring true – particularly within the fashion sector whereby Australia is hemorrhaging online sales to overseas counterparts.

Online Australian Consumers Wont Wait For Fashion Retailers

Online Retail WebsiteAccording to stats released by the online retailers conference in Australia more than 45 per cent of all online retail sales are currently going offshore from Australia. This compares with just 14 per cent in 2005. And whilst fashion is not the only segment whereby Aussie retailers are missing out to overseas competition, it seems that international fashion retailers are actively pursuing Australian consumer $$$$ and are rubbing their hands together in the process.

According to a recent article in the Sydney Morning Herald, several British and US retailers have exploited the lack of investment in eCommerce fashion in Oz. In April, the British online designer boutique Asos.com listed Australia as its fourth-strongest international market behind the US Denmark and France and Net-a-Porter also lists Australia as ”one of its biggest international markets”. Whilst America’s Revolveclothing.com says Australia is its third biggest market outside the US.
It therefore seems Australian consumers have a healthy appetite for buying fashion online and are going abroad because of the lack of choice in the local market.

Can Clothing Retailers Afford Not To Do It?

Many Australian fashion retailers are still yet to realise the value in online retailing, however there are a select few that have made an investment in the space and are deriving significant value from their online stores. Witchery, for example, lists its online store as its fourth most profitable outlet, out of 80 stores nationally. And Mimco, which is owned by Witchery Holdings, ranks its online store as its 10th most successful, with turnover of about $90,000 a month.

However it is not only profitability and revenue that is delivering value for brands. Online stores have provided brands such as Guess and Sportsgirl with the ability to reach out to consumers in cities and towns that are not close by to bricks and mortar outlets;

Simon Nankervis, Managing Director of busbrands which owns the rights to Guess in Australia said about 80% of the sales within the past week have been from areas where Guess does not operate a retail location, and he wants it to stay that way. “This is being done by consumers where there is no retail location, such as the Northern Territory, or like in other parts of Western Australia as we only have one store in Perth.”

The Threat Of Inaction

online fashion retailForrester Research predicts Australian online spending will grow to $32 billion by 2012, with further evidence to suggest that this could just be the beginning. Figures from IBISWorld show that online sales may eventually reach $75 billion as more retailers increase the efficiency and reliability of their online channels.

Fashion retailers need to realise that getting the right mix for success is not an easy task in the online world and fashion retailers need to be ramping up their online stores now to;

1) Gain a larger slice of the current consumer online fashion spend
2) Ensure that they are well established to capitalise on the future revenue opportunity which is presenting itself.
Inaction is not an option – if eCommerce and digital strategies do not become fashionable for Australian clothing retailers soon, the brands that do not move with the times maybe left behind like last seasons unpopular lines.
What are your thoughts on the lack of eCommerce investment by Australia’s fashion retailers?

Article References
www.smartcompany.com.au/retail/20100217-fashion-brand-guess-opens-web-store-in-bid-to-expand-retail-reach.html+online+fashion+retailing+australia&cd=4&hl=en&ct=clnk&gl=au
http://www.smh.com.au/lifestyle/fashion/new-york-london-paris-prized-labels-just-a-click-away-20100515-v5j7.html
http://www.insideretailing.com.au/Latest/tabid/53/ID/8174/Aussie-retail-dollars-head-overseas.aspx

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It’s Time To Get Serious About Online Retailing in Australia

Online Retailing in Australia

With Australians spending more time online than ever, the cost of broadband falling and speed improving something big is going to happen. The digital industry and in particular online retailing is about to explode in Australia, but not before some of the big retailers get serious about the opportunity.

This article reviews 3 sub-sectors of online retailing – groceries, consumer electronics and fashion – to identify the true opportunity for these segments in Australia.

Groceries

Current State of Play;
According to Aus Food News approximately 5 per cent of Australians will purchase groceries and food online, making it the second least likely category – only ahead of furniture and homewares. Compare these figures to the UK, which is at 19%, and it is easy to see how far this segment is behind other global markets. What’s more in the UK, grocery shopping is now the largest online shopping sector – representing 31% of total online sales.

The opportunity
Whilst the portion of Australians purchasing groceries online is small, the opportunity is a lucrative one. However spending time on both Woolworths and Coles sites demonstrates some of the issues with the current online offerings. In particular delivery times of up to 4 hours, site loading times and the general user experience is hindering the growth of this market. And for the grocery market, usability will be a critical success factor. Those between the ages of 44 and 54 are the most likely group to purchase groceries online, with about 10 per cent willing to do so. However as this age group have not grown up with technology an interface that is simple to navigate is key.

Additional barriers which need to be considered are those pertaining to concerns over quality and freshness which is a deterrent for online grocery shopping. This is of particular importance for Woolworths whom prides itself on quality of produce.

Consumer Electronics

Consumer ElectronicsCurrent State of Play;
If there is one sector which should have smiles ear to ear about its online potential it is the consumer electronics sector. A survey by Deloitte found that 23% of Australian would buy consumer electronics online. In addition year on year growth in search volumes (refer below) for related categories demonstrate that consumers are spending an increasing amount of time searching for consumer electronics online.

Search Volumes
• Laptop-related queries were 54% higher in March 09, compared with March 08.
• Consumer Electronics-related queries were 54% higher in March 09, compared with March 08.
(Stats from Google, Mar 09)

The opportunity
Despite the statistics at least one big brand is yet to be convinced about the potential of the online channel. In a recent interview, JB Hi-Fi’s CEO stated that the online store only contributes 1% of total sales and this will not change anytime soon. Thus although there are many positive signs does this sector have potential if one of the largest players is not able to monetize the online channel?

The JB Hi-Fi example is one online store of many that will in the coming years not live up to expectations. This is not because the online channel is not a lucrative proposition but the online experience lacks strong execution to provide the user with a unique online value proposition and user experience.

In the current economic downturn, consumers more than ever are looking online to secure the best price for electronics thus now more than ever the consumer electronics sector should be experiencing growth online. However to be successful brands need to provide valuable content to allow consumers to compare and contrast prior to making the decisions and review their experience post purchase. Without this, these high involvement decisions will continue to drive consumers in-store or to competitor sites so they can obtain the information they desire to make decisions.

In addition, there is a growing global trend which sees many consumers put the item on-hold online and pick it up in store. This trend is one which could significantly benefit both consumers and the brand in the electronics sector. This strategy provides consumers with the reassurance they need instore before making the final transaction and enables brands to understand the true value driven through their online store.

Fashion

Current State of Play
In the UK, online clothing and fashion represents 21% of all online purchases and in the past year online sales have grown 17% despite the overall sectors decline. Closer to home though, statistics about size of market or consumers intent to buy online are more difficult to come by. If however Google search volumes combined with overseas success provide any indication about the market potential, the clothing and apparel segment is set for solid growth.

Online ShoppingAustralian Search Volumes
• Shopping-related queries were 22% higher in March 09, compared with March 08
• Apparel-related queries were 34% higher in March 09, compared with March 08
• Queries for Clothing labels and designers were 29% higher in March 09, compared with March 08
(Stats from Google, Mar 09)

The opportunity
For clothing labels to be successful online there are some hurdles that must be overcome and if done effectively, the organisations that do so could reap the rewards.
The big difficulty for online clothing retailers is the inability for consumers to touch or try on the product. To combat this one of the critical success factors is return policies to enable consumers to minimise the risk. However that said, some items should be easier to retail online than others. Items such as night ware or repeat purchase lingerie should benefit from the opportunity if the online experience is a good one. That said even in this category, some of the major retailers a missing a trick.

Above all else, my personal belief is that the potential of the Australian online retailing industry lies in the hands of the retailers themselves. Without a range of online stores from the larger/trusted brands across the online retailing segment, Australians are not empowered to shop online. So before organisations judge the true potential it is important that the appropriate investment is made in both the website and online promotion and that the critical success factors are clearly defined. Get this right and for most brands – online retailing will add another profitable channel to the existing bricks and mortar establishment.

Do you have an opinion on the opportunity of online retailing in Australia, if so please add your comment below.

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digiCast – Social Shopping – Why It Will Take Off Down Under

Online Retailing

With social media cementing its position in our lives there is barely time for marketers to get their head around a new site/social channel before the next one is upon us.

Whilst social shopping is not a new concept it is yet to reach the mass adoption of other social media channels. However it seems that this is all set to change.

New to social shopping? What is it all about?

Social shopping websites/networks leverage the community and relationship aspects of social media to enable consumers to share, discuss and rate retail products.

Why will it take off now?

The online influence

Online retailing is just one of the booming digital sectors in Australia and whilst not all activity in this sector directly results in online sales – the influence of the internet in the decision making process cannot be ignored;

Research from the Australian Centre for Retail Studies (January 2008) showed that 50 per cent of Australian shoppers had researched their products online before heading into a store to complete their purchase.

Retail Search Behaviour

In addition many sectors are experiencing significant growth in search queries which depict the growing interest to research and or buy retail products online. So which sub-sectors are sparking interest on the web?

According to Google in a recent press release;
• Shopping-related queries were 22% higher in March 2009, compared with March 2008 Apparel-related queries were 34% higher in March 2009, compared with March 2008
• Queries for Clothing labels and designers were 29% higher in March 2009, compared with March 2008

Online Retail CustomersOnline Retail Spending Trends

If like most trends we are behind our US & UK counterparts, online shopping is set to grow in Australia. Online shopping comprises almost 7 per cent of all purchases in the British department store segment and 8 per cent in the US, IBISWorld figures show. In Australia, online shopping is worth less than 3 per cent of department store sales. However according to IBISWorld, online retailers will grow by 4.3 per cent per annum over the next five years, providing much-needed good news to the fashion industry.
Part of this trend is driven by the economic downturn which is driving more Australians to turn to the internet to source bargains through research and price comparisons rather than buying on impulse. However part of this is also driven by the increasing amount of time users spend online.

What sites are out there?

There are already many social shopping networks and bookmarking sites that are popping up. I have detailed some of the popular sites for you however this is becoming a popular space and there are many other alternatives;

Kaboodle
Very popular on a global scale Kaboodle attracts more than 12 million visitors per month. Kaboodle is a social shopping network where users can discover new products and recommend items to their friends.

According to Alexa, Kaboodle sits within the top 1000 sites in Australia. 1.6% of their total monthly visitors are from Australia which equates to nearly 200,000 Australian visitors per month.

Online Shopping BookmarkerStyleFeeder

StyleFeeder is said to be more of a social bookmarking service for shopping to enable users to bookmark items of interest and gain ratings from their friends.

According to Forrester Style Feeder generates 1.2 million unique visitors per month, of which 1.8% are from Australia – representing approx 22,000 unique Australian visitors per month.

ThisNext

ThisNext positions its site as a shopcasting network to discover and broadcast a users interest in products. According to Alexa, Australian traffic to thisnext was approx 45,000 in September of 2008 and given the sites growth this number could be substantially higher.

Tribesmart

Tribesmart is a social shopping community which has a strong emphasis on product reviews as well as offering the opportunity to gain user opinions and have discussion with tribes. Accordingly to Alexa Australians represent a total of 10.6% of the sites total traffic. In December 2008 the site only generated 42,000 unique visitors thus only 4,200 Australians visited – however I have listed it as one to watch given the portion of Australian users.

So what opportunities exist?

If you are managing an eCommerce site in Australia and are new to social shopping the first step is to start to observe community behaviour and interests to determine which site/s are best for your target audience.

These sites offer many benefits to marketers from more traditional online opportunities such as affiliate programs and online advertising, through to other benefits derived from social media platforms such as group development, ability to demonstrate specialist knowledge in niche product categories through Q&A type functions, product feedback gathering along with gaining market intelligence to identify future/upcoming trends.

If you have experimented with social shopping sites, or want to add an additional popular social shopping site for Australians why not share your thoughts below.

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