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Ecommerce and Retail

2017 Spending, All Wrapped Up – Gifting Retailers Enjoy a Healthy Year (and a Healthier Christmas)

Ahh Christmas, tis the season for giving. But Aussies also love to gift year round and are increasingly buying gifts online, according to research from our State of Ecommerce Report.

In our study of Australian online retailers across a range of sectors, gifting was revealed to be the highest performing of all sectors with month-on-month sales increasing by a whopping 59% over 2017, and Australians spending an average of $127.78 in each transaction (only $7.78 more than what we spend on our pets).

Aussies will spend an average of $593 on gifts this Christmas according to a recent CommBank survey; culminating in a collective $11 billion on presents and a total of $22.1 billion over the festive season. And we pay for them using a variety of methods including credit card (46%), savings (75%), loans (4%) and Christmas bonuses (3%).

Christmas-gifts

The number of people choosing to shop online for presents has increased considerably this year too, and this shift has been seen across all age groups. About 13.3 million people plan to shop online these holidays (up 1 million from 2016), with many purchasing online after browsing first in bricks and mortar stores.

Here’s a breakdown by demographic of who will shop online for gifts:

  • Grey Nomads - 19%
  • Baby Boomers - 64%
  • Generation X - 79%
  • Generation Y (Millennials) - 86% (but 44% will browse in physical stores first and then find deals online).
  • Generation Z - 82% (but 62% will research purchases online before buying in a physical store)

Avoiding queues, the fight to the death for that last carpark, and the sheer chaos that is holiday trading are obvious reasons to shop for gifts from the comfort of your home, but what else drives people to buy online? In the Neto State of Ecommerce Report, we found that ease and convenience, sales and promotions, and the search for unique products or those not available in Australia are also key drivers of online shopping.

Neto State of Ecommerce Report - graph: what drives people to buy online
What drives people to buy online

And once shoppers are online, what factors will drive them to purchase in your store over others? Price is the number one factor, followed closely by free delivery, discounts and offers.

Neto State of Ecommerce Report - graph: what factors drive purchase decisions
What factors drive purchase decisions

Most Popular Gifts for Christmas 2017

Top gift ideas this Christmas include include gigantic pool float toys (move over flamingo, the unicorn is here), sneakers from iconic brands like Converse (Chuck Taylors originals, $59.95) and Nike (Juvenates, $129), voice activated speaker systems like Google Home ($149) and Amazon Alexa (Echo Dot $49.95), and wireless headphones like the Bose Soundlink Around-Ear Wireless Headphones II ($329.95). Novelty socks and jocks (go bamboo if you want quality) are still crowd favourites for Dad.

Top gift ideas 2017 - giant inflatable unicorn
Giant Inflatable Unicorn. Source: Anaconda
Top gift ideas 2017 - Google home
Google Home. Source: Google

When it comes to toys, the L.O.L Surprise Ball ($69.99) which has seven layers of wrapping containing over 50 ‘surprises’ under each layer including a doll has been pipped as a top-seller, fueled by the ‘unboxing’ craze where people film themselves unwrapping gifts or packaged goods and post the videos online. Toy industry veterans, Lego, continue to make many kids’ wish-lists with their Boost ‘Build Code Play’ visual programming kit ($199.96) and special edition Star Wars Lego kit ($159.99).

Top gift ideas 2017 - L.O.L suprise ball
L.O.L Big Surprise Ball. Source: Target

Our research found a 39% increase in spending on toys and hobbies in 2017 with average basket size growing from $83.17 to $136.41 over the year. And spoiling the kids is something parents will do whether they have the funds available or not it seems, with a 12% increase in the use of Buy Now, Pay Later methods for toy purchases.

Food and Alcohol Retailers Win Too

With all of the prawns, plum pudding and eggnog (does anyone even drink eggnog?), food and liquor sales are also expected to grow over the silly season. 'Twas a healthy year for food and alcohol ecommerce retailers, with findings from our report showing a 34% increase in average basket size over the year to $150.13, and these retailers are likely to finish up the year feeling pretty content with Australians predicted to spend 2.4% more on food and 4.2% more on alcohol this year than 2016. As the saying goes - eat, drink, and be merry!

Where does your sector fit in? Get the Neto State of Ecommerce Report to find out.

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