Although domestic retailers in Australia represent the highest proportion of online spend, with 74.6% of the total market value, this still means that just over 25% of the total is being spent with overseas merchants and cross-border shopping is not at all unusual amongst Australia with over 80% of consumers having made an overseas purchase at some point; this far exceeds the global average of 51.2%. The most popular cross-border targets for Australian shoppers are UK and US retailers, both of course sharing (mostly) a common language.
Rather than ‘where’ a product comes from, Australians are far more interested in how quickly it can reach them and therefore consideration needs to be given to the volume of transactions being imported into Australia and the channels used.
As a non-Australian e-retailer reaches critical mass and transactions increase, the supply chain model used will need to adapt to a physical distribution presence. A typical supplier will start off sending individual products.
The geographical split of delivery locations is also interesting as the size of the landmass provides one of the biggest challenges to efficient fulfilment in Australia. In particular the postal areas, including Northern Territories; Tasmania; Queensland County and Western Australia County represent specific challenges, particularly around geography and population density.
Of the August volume delivered through wnDirect, the majority went to the major metropolis whilst only 8.12% went to rural areas.
This diverse range of destinations with delivery ‘hot spots’ requires multiple points of injection through which an international carrier can interface with local delivery solutions. wnDirect for example, ships in through Sydney, Melbourne, Perth and Brisbane thereby shortening the final ‘leg’ whilst also providing redundancy in the case of natural disasters such as the bush fires of 2014.
Australian consumers expect to be able to return unwanted goods and receive a replacement or credit with the minimum of fuss or delay.
Typical issues facing merchants include getting the product back in to inventory so that it can be resold. With the costs and distances involved, many international merchants consider destroying the stock rather than return to their domestic distribution centre. Alternatives include creating a local stock pool so as to services future orders. Aside from the obvious physical issues around product returned by the customer, there are also the financial implications of the transaction itself; in particular customs duties on more expensive items.
Australian Customs take on how cross-border returns are dealt with will impact how returns and refunds operate (see the ‘Customs and Clearance’ section in the full passport). Professional advice should be sought as to how a merchant might want to cover this in their terms & conditions but also how they might want to arrange their reverse logistics and refund processes.