Package deal
By Andrea Jones | smh.com.au | 14 March
This was shopping heaven. The courier at the front door handed over a brown cardboard parcel tied with lilac ribbon. Inside, with a flutter of pleasure, I discovered a silver, gift-wrapped package and a free gift. It wasn't a birthday treat, rather it was delivery of an online order I'd made several days before (in pyjamas with steaming mug of tea in hand) of a luxury brand of cosmetics that online cost less than duty free. In that moment I became a convert to online shopping. What's not to love? I didn't have to drive to a shopping centre; queue at a cosmetics counter; no one tried to "upsell" me into spending more than I needed to ... In short, it was cheap, fast and, when packaged this nicely, had all the thrill of the best retail therapy.
I'm not alone in becoming an online shopping convert. DealsDirect.com.au is Australia's largest online department store. Last Christmas it was shipping 10,000 orders a day. "But that's just a fraction of what Amazon.com makes in one hour," says DealsDirect co-founder Paul Greenberg. "It gives you an idea of the potential."
EBay is, of course, the gorilla of online shopping, accounting for five out of every six online purchases in Australia. These days it's not all other people's unwanted second-hand stuff. In fact, 60 per cent of what's there is new. If you've ever bought or sold on eBay, consider this: more than 52,000 Australians derive their primary income from selling on eBay.
"The [online] market in Australia is larger than you think," says Simon Smith, chief executive of eBay Australia. "Excluding travel and groceries, the e-commerce market is worth $12.5 billion."
A quick internet search of any item you fancy shows that beyond eBay there's a growing band of online alternatives to your local shopping centre.
At DealsDirect.com.au, which Greenberg describes as "an online department store with a discount flavour, like a Big W [or] Kmart", you'll find items ranging from toasters to sunglasses. It started as an eBay-based business called Auctionbrokers Australia before breaking away in 2004. Now, Greenberg says, it has a turnover "in the tens of millions of dollars", a staff of 80 (which he predicts will swell to 150 by Christmas) and a vast 40,000-square-metre warehouse under construction in Ingleburn.
No wonder Greenberg says his business "has become like a runaway train". And there are plenty of hungry newer competitors such as OO.com.au and dStore.com.au snapping at its heels. At the other end of the market is a wide range of specialist boutiques catering to any niche, taste or interest.
Ashling Punnett and Megan Butler, co-owners of children's bedding and furniture label Lilly & Lolly, were among the first children's labels to launch an online store, Lillylolly.com.au. Initially they thought it would be a useful way of selling sheet sets and small, low-risk items.
"We honestly didn't think people would buy the furniture online - especially not without talking to us first. But that's not the case," Butler says.
She is still astonished at the volume of orders that come through for beds and drawer sets without people ever seeing the objects they are buying or speaking with a salesperson.
As with many online retailers, they have a money-back guarantee to all customers who aren't fully satisfied. Butler believes that's a significant factor in people's willingness to leap into cyberspace with their credit cards.
One of the greatest fears about online shopping is security. Last year Fair Trading NSW received 826 complaints relating to online shopping. These were generally about the quality of goods and service. There were no prosecutions for internet fraud.
There are measures you can take to keeping your transaction as safe as possible (see box). Meanwhile, there's a growing band of people who have no fear of buying online.
"One standout increase is the growth of higher-priced appliances for the home. Appliances sales are generally around the $1000 mark . . . [but] there are many more approaching $10,000," says Jim Munro, director of www.shopsafe.com.au, a comparison-based site that will only list stores with secure online shopping.
Two and a half years ago former electrical salesman John Ryder opened www.appliancesonline.com.au. He says: "I remember when my first sale came through I was surprised [that people would buy something sight unseen online]." But Ryder's original business hunch has proved true: "I thought there was a part of the market out there that required replacement appliances in a quick timeframe. For instance, if you get home tonight and find that your fridge has broken, you don't have to wait until the stores open tomorrow and then wait several days for delivery. You can get online tonight and in many cases have one delivered within 24 hours."
Given this, eBay's Smith is surprised more mainstream stores aren't opening big online stores.
"In Australia the online space is occupied by entrepreneurs - people like eBay and DealsDirect - there aren't any bigger [retail] players," Smith says.
David Jones rolled out an ambitious online store in 2001 but got its fingers badly burnt. Within two years it had posted multimillion-dollar losses. (DJs now has a small, tightly edited selection of products at its online store.)
And yet in Britain the reverse happened when, two years ago, the giant electronics retailer Dixons closed all its stores to concentrate exclusively on its online business. Dixons claimed by losing its shopfront overheads it could lower the price of its goods without losing volume sales.
It's a tricky business setting up an internet shop - it's not enough just to take the money. The hardest part is ensuring there's plenty of stock and that customers get what they've paid for within several days.
"When [online shopping] goes right, it's like surfing a good wave. When it doesn't go well, it's challenging," Greenberg. And many Australians who ordered Christmas presents last year from less well-supplied online stores could testify to this.
The biggest challenge for the continuing success of online stores is competing against the instant supply advantage of a real store. A real store allows customers to walk in, see something they want and walk out with a shiny new product in their hands.
Some online retailers are finding inventive ways to fight back against the "real" retail experience.
Apple promises people who buy iPods from its online store that, although they'll pay full price, which is generally $10 more than discount retailers, they get free, cool engraving, free shipping and free gift wrapping.
Then there's Gilletts.com.au, an online jeweller where there's no embarrassment of having to ask the price and the range is displayed in such a large, clear and user-friendly way that it surpasses any trip to the jewellery store.
James Murphy, of OnlineShoppingInternational.com, has a keen eye on these developments. "A trend which has come over from the US is free shipping offers. Particularly since last Christmas we have seen more free shipping offers than ever before," he says.
"Online shopping in Australia is a couple of years behind in terms of saturation, variety, number of stores," he says. "Last Christmas online shopping was the biggest ever. We're nowhere near where we could be, but once people see the benefits and feel safer, and manufacturers release more of their product online, we're really going to see it take off."
Shop safely on the internet
* Check the seller's refund, warranty and returns policy.
* Check any feedback that has been made about the seller to get an idea of his or her reputation and reliability.
* Check shipping costs. The item may be cheap but some sellers make their profit by charging inflated shipping costs.
* Create a secure password by using a combination of upper and lower case letters as well as numbers.
* Always pay by credit card. That way there's a chance you can have the transaction reversed if something goes wrong.
* Ensure that any page you type your credit card details on is secure. If there is an icon of a closed padlock on the bottom left-hand corner of the screen, it is secure. Similarly, if the address at top of the page begins https (instead of the usual http), it is also secure.
* Print a copy of your order before you send it.
* Ensure you'll be home for delivery or get it delivered to a secure address.
* If you run into trouble, seek help through the Department of Fair Trading. See www.fairtrading.nsw.gov.au/shopping/shoppingfromhome/internetshopping.html for information about protecting yourself when shopping online.
* For problems with purchases from overseas sellers you can contact www.econsumer.gov, a body set up by 21 countries to deal with international complaints.
What we buy
Here's some of eBay Australia's statistics:
* An item of women's clothing is sold once every nine seconds.
* A DVD is sold every 20 seconds.
* An antique is sold every two minutes.
* A GPS navigation system is sold every five minutes.
* A car sells every 10 minutes.
First published by Smh.com.au on March 14 2008
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