The future of eCommerce
Order online tonight, see the package arrive tomorrow – seamless. However, it takes a lot of research and dedication to innovation to make eCommerce deliveries so simple. Bob Black, CEO of StarTrack and Group Chief Operations Officer of Australia Post, explains how they deliver four billion parcels, packets and letters every year.
Can you tell us the trends in what people are purchasing?
The fastest-growing areas are fashion, media and electrical appliances from merchants such as The Iconic, Foxtel, Kogan and Booktopia. It’s omnichannel now: people want to touch, feel and buy instore but also want to buy online. Transactions on mobile devices have grown significantly, by 52 per cent compared to 2015 in Australia, as have international purchases.
How has the international eCommerce market affected the domestic one?
Australian shoppers have again fallen in love with buying from global businesses. More than 30 per cent of online purchases delivered in Australia now originate from overseas. You can order from overseas and easily receive delivery within the week. My wife buys from Marks & Spencer in the UK so I get regular updates on our service quality!
How have consumer attitudes towards eCommerce and deliveries changed?
The frequency of online shopping has exploded and it’s all about convenience. Consumers want to be in control, they want choice and they want to know when they’re getting their delivery. Our challenge is not just providing them with the day of delivery but also giving them the choice of where and when we deliver, so they can decide if they want it delivered to their door or to one of our 4000 collection locations across Australia.
How do you work with merchants to keep up with these changes?
We keep very strong relationships. We host workshops to ask them what they want and share market trends. Merchants are always challenging us. For example, say someone is at Bondi Beach, the clouds come over and they want to order a top, would we be able to deliver it to the beach and put it straight into the consumer’s hands? Would there be great demand? Possibly not. But it’s about challenging us to see what’s possible.
What are some initiatives you’ve developed in response to changing expectations?
We put a lot into the training and development of our workforce to ensure they’re very customer-centric. People love connecting with their postie and delivery driver so we spend a lot of time building that connection. Giving consumers choice is also important. And for consumer convenience, we’ve partnered with Woolworths to roll out an additional 500 Parcel Lockers nationally over five years on their sites. We’ve also been trialling a host of other things to make the customer journey even better.
“While our focus is on what we need to do today, we’re also very aware of what’s around the corner.”
For example, we’ve trialled homes in Victoria with a solution called Receva, which are small, secure locker boxes at your home. These lockers are activated by Bluetooth and can send a message to the receiver that their item has been delivered.
So, what do you see as the main opportunities for StarTrack in the future?
Online sales in Australia account for about seven per cent of total retail sales, whereas in markets such as the UK or the US, it’s as high as 15 per cent. So the ultimate opportunity here is the potential for online to double over the next four to five years. We’ve seen a significant rise in volumes and this demand will continue. We have six dedicated freighters operated by Qantas and we’re flying more than 200 tonnes of airfreight every night, which is over 20 per cent more volume year-on-year each week. During peak online promotions such as Click Frenzy and Black Friday, we can see this rise up to 35 per cent.
Is StarTrack focused on any other innovations?
Our greatest challenge is going to be keeping capacity above consumer demand. We have significant investment in vehicles, automation, new warehouses and new equipment. In the future there could be drones, robotics and driverless vehicles so we need to trial them all. You don’t have to look too far ahead to say there will be a big shift in how we do things in the next decade. While our focus is on what we need to do today, we’re also very aware of what’s around the corner.
What role does the delivery play in a customer’s view of the transaction?
The delivery experience is core. It’s the last moment you’ll remember. You have to get the last mile correct, get the parcel to the customer and get the smile. As well as all the activities we’ve been doing to improve the experience, we’ve also been trialling sending text messages to our customers to rate the driver out of five when they receive a parcel. Currently, our average rating is 4.8 so we know our drivers are doing a great job when they make the deliveries.
How has Australian retail been changed by eCommerce?
It’s been overwhelmingly positive, with the biggest beneficiaries being the established retailers who have jumped on board. Part of me thinks nothing has really changed – good engagement with a retailer is the secret but there’s generational transition and consumers are more empowered than ever before.
What do you consider the key trends in eCommerce?
The first is convergence; the blurring between physical and digital retail. I call it “phygital retail”. We’re living in a convergent retail environment where the path to purchase is not linear. Customers research online and buy offline and vice versa. The second theme is a flat-world opportunity where retail becomes a borderless business. The third is “brand is king”. There are businesses building a quality retail experience and also an outstanding brand.
What about trends in the products that people are buying?
Fashion has been the standout. Ten years ago, the soothsayers were predicting that no-one would buy fashion online. How bizarre is that? It’s an easy-to-ship item and businesses such as The Iconic are doing three-hour shipping so we’re overcoming barriers of time. We’re quite startled at the growth of the Chinese adoption of brands like Blackmores, as well as pawpaw cream, and we look to the Australia Post group to help grow “Brand Australia”. These global niche markets are proving to be formidable businesses with huge demand.
How do you advise retailers about keeping up with changing trends and consumer expectations?
Too many of us talk about customer centricity but don’t live it. Put the customer at the centre of what you do. If they’re asking for something, deliver it, fulfil their needs and build a commercial model.