Australians are preparing to spend $11 billion on Christmas gifts – and analysts predict the December quarter will smash e-commerce records

Australians are preparing to spend $11 billion on Christmas gifts – and analysts predict the December quarter will smash e-commerce records
  • Australian shoppers are gearing up to spend $11 billion on Christmas gifts, according to new research from the Australian Retailers Association and Roy Morgan.
  • Much of that spending will be funneled to e-commerce retailers, with most respondents indicating they are making more online purchases than in 2020.
  • Analysts predict e-commerce revenue will hit record levels in the December quarter.
  • Visit Business Insider Australia’s homepage for more stories.

Australia’s e-commerce sector is likely to have its biggest quarter on record through the final months of 2021, according to new market analysis, with locked-down shoppers preparing to spend big through Christmas, Black Friday, and Cyber Monday.

Fresh research from the Australian Retailers Association and Roy Morgan suggests local shoppers will spend $11 billion on Christmas gifts alone.

Out of nearly 2,400 respondents, nearly half indicated they would conduct most, if not all, of their Christmas shopping online.

More than half (58 per cent) of surveyed Australians indicated they are making more online purchases, or considerably more, compared to last year.

And 79 per cent of surveyed Australians said they planned to spend the same amount or more on Christmas gifts than they did in 2020, suggesting a major windfall for retailers with digital shopfronts.

The survey, conducted over the first two days of September, heralds a “Christmas retailing season that is set to see a record amount spent online,” said Roy Morgan CEO Michele Levine.

The data takes the lockdowns covering much of NSW, Victoria, and the ACT into account.

Levine acknowledged plans to reopen brick-and-mortar retailers in those jurisdictions, combined with pent-up spending demand through lockdowns, could boost spending in the final months of the year.

However, the data suggests the e-commerce transition will still funnel spending towards digital retailers.

Just 5 per cent of respondents say they are making fewer online purchases than in 2020, the data shows.

Expectations of massive December quarter sales come not just from the Christmas boom, but from the adopted Black Friday and Cyber Monday shopping events in November.

Online shopping purchase volume peaked in 2020 around Black Friday and Cyber Monday, according to data provided by Australia Post.

But strong e-commerce interest through the lockdowns of August this year saw online shopping volumes near those lofty 2020 peaks.

“We might be in September, but we’re already seeing Christmas levels of demand with current online purchases,” Australian Retailers Association CEO Paul Zahra added.

Should shoppers not revert to their old habits when retail reopens in NSW, Victoria, and the ACT — or if reopening plans are pushed back, due to sluggish vaccination rates — online retailers could stand to make billions in revenue through the final months of the year.

Analytics firm Power Retail forecasts e-commerce retailers will book $16.9 billion in revenue through the December 2021 quarter, crushing the seasonally adjusted total of $9 billion recorded through the December 2020 quarter.

Still, retailers should be aware of potential shocks to the supply chain system as parcel demand picks up.

AusPost suspended e-commerce parcel pick-ups for three days to relieve demand on its systems, which were hampered by some 500 staff entering isolation after potential exposure to COVID-19 cases.

Separately, international supply chain disruptions and shipping delays have resulted in product shortages and lengthy wait-times for stock replenishment.

“Consumers should be mindful of the strain our supply chains are under and make sure they get their online orders in on time to avoid disappointment,” Zahra said.

Power Retail says e-commerce retailers should keep a keen eye on stock levels and communicate them with customers, given the sheer volume of sales at stake.

Thirty-nine per cent of shoppers would be unlikely to shop with a retailer again if their order was cancelled due to stock shortages, the organisation said.

Just over half would abandon their purchase altogether, Power Retail added.