Ecommerce and Retail • Neto
Ecommerce is on the rise, it seems, with ex-corporates, entrepreneurs, mum-preneurs and uni-preneurs setting up online stores and having a go at selling products to the wide world of consumers.
But some industries are stronger than others, and we want to share these insights so that you can too get a bite of the pie. Recently, we wrote about the fast growing Gifting and Supplements and Nutrition ecommerce industries as well as Australia’s favourite pastime, Sports and Recreation. Today, we are going to take a look at another favourite pastime, this time for a slightly younger demographic (and for young at heart)—toys and hobbies.
Toys and Hobbies involves the sale of any toys, game and hobby products including dolls and children's’ toys, board games, traditional games and electronic games, as well as arts and craft supplies.
At present, online retail makes up 7.3% of the retail market in Australia, and with a current annual growth rate of 6% it is expected to grow to 9.3% of the market by 2021; equivalent to $28.91 billion in spending.
According to Neto research published in the State of Ecommerce Report, Toys and Hobbies is one of the top performing sectors by average spend, with an impressive 39% increase in basket size to $136.41 over 2017, alongside other top performers Food and Alcohol (34%) and Tools and Hardware (47%).
The Toys and Hobbies market currently comprises 3.6% of total online spending in Australia and is growing at an annual rate of 23%. But with this growth in online comes the slowdown of traditional retail (growing at just 1.4%) and in-store spending. The shift was marked by toy giant Toys ‘R Us sadly closing their doors last year, but many other bricks and mortar retailers are finding success by adopting an omnichannel retail model selling both online and in store.
Now that we know that shoppers are looking online for their toy and game purchases, let’s take a look at some of the factors that drive them to purchase.
The State of Ecommerce Report also revealed the factors that compel shoppers to go online. Ease and convenience took that cake with 82% of shoppers surveyed ranking this as a top reason, followed by sales and promotions (46%) and the search for goods not available locally or in Australia (42%).
And once they get online, what makes customers decide to purchase from you over another store? Here’s what consumers told us:
The importance of free shipping, coming in at second place is really, really important. In fact, according to research from fulfilment and shipping company, Temando,
40% of consumers surveyed said they would abandon their carts if there was no free shipping, and the number rose to 65% when shipping was considered too expensive.To learn more about how to charge for shipping and if free shipping is right for you, check out our post Shipping and Order Fulfilment for Ecommerce: The Only Guide You'll Ever Need.
An additional factor that isn’t often given the attention it deserves is the payment methods you offer. It’s important to think carefully about both which and how many payment methods you offer, as many customers will abandon their carts if their preferred payment method isn’t available, like PayPal for example. Data from Neto merchants showed that 75% of sales came through PayPal for the Toys and Hobbies industry, 18% via credit card and 7% through Buy Now Pay Later options, the usage of which rose by a huge 12% over the year.
We spoke to Neto retailer, Ben from ihartTOYS.com, to see how the growing demand has impacted their business and we asked him to share some tips for other retailers to succeed online.
ihartTOYS.com sell a range of kids toys, outdoor and educational toys, games, inflatables and arts and crafts. From launching the online store in August last year to a huge increase in sales in the lead up to Christmas and into the New Year, Ben was impressed by the volume of sales and ihartTOYS.com was off to a strong start.
Selling on eBay is bound to be a successful strategy for Ben and ihartToys.com, based on our research which shows consumers’ top preference for shopping online is via online marketplaces (39%), in front of company websites (32%) and social media (7%). And Ben is keen to continue leveraging the marketplace strategy:
Selling our products on eBay has been great for our business and we look forward to branching into new marketplaces.
Are you too planning to expand into marketplaces? Not sure which one is right for you? We covered this in our recent post eBay, Amazon, or both.
ihartTOYS.com will strive to provide Australian families with an affordable price point for top quality toys in 2018 and beyond!”
There you have it ladies and gentlemen, the magic of the Toys and Hobbies industry won’t be disappearing anytime soon, and ihartTOYS.com has you covered for all your playtime needs.
Are you a Toys and Hobbies retailer looking to grow your business? Neto has helped lots of retailers like ihartTOYS.com find success in the online world with our all in one solution for ecommerce, POS, marketplaces, inventory and fulfilment. Give it a go for free.
Thinking about selling on Marketplaces like iHartToys.com? Download our free Sell Everywhere guide and get started today!