In Australia’s online shopping wars, shipping is key

Angus Kidman 17 July 2017 NEWS

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If you want to beat Amazon, you can't overcharge for postage.

I bought a CD last week. Yes, that still happens, and vinyl isn't king again yet. For the privilege of receiving an excellent compilation of obscure 1980s 12-inch mixes (Dugites FTW!), I paid $1.67 in postage.

That's noteworthy because it's reasonable. When online retailers in Australia aren't messing up by sending their goods in gigantic boxes, they're messing up by charging ridiculously high sums for postage. With the imminent launch of Amazon, that approach isn't going to fly. If the postage is more than the item, who's going to bother?

One of Amazon's key selling points is Amazon Prime: free shipping for a one-off annual fee (which also includes access to Amazon Prime Video and Music). While Amazon hasn't officially announced that Prime will arrive in that exact form in Australia, and high postage rates might make it challenging, it's clearly what eager Amazon-watchers are expecting.

This isn't just a theoretical concern. Temando's State of Shipping in Commerce report suggests that 65% of Australians have abandoned an online shopping purchase because the shipping costs are too high.

That said, cheap postage won't necessarily work if the experience is poor. The same study reported that 59% of consumers say that a negative shipping experience will put them off buying from that retailer again. And just 4% of us cite free shipping as the primary reason we shop online. But when you're choosing between stores, it's a key consideration.

I really wanted that CD, and I guess I would have paid up to $5 in postage for it from an Australian store. But if it was available with free shipping from Amazon, where I already have an account, I doubt I'd look elsewhere. That's the challenge every other retailer in Australia faces.

Angus Kidman's Findings column looks at new developments and research that help you save money, make wise decisions and enjoy your life more. It appears Monday through Friday on finder.com.au.

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