Digital Business

Digital Business insights: The genie is out of the bottle

THE government is watching us and tracking us electronically. Not just our government but government in general. Some deliberate and some accidental and some just because they can.

24 hours a day. 7 days a week. That is not going to stop any time soon. And more sensing, imaging and tracking technology is being connected and added every day. More data is being gathered and stored. And the data is being queried, because it can be.

Corporates are doing the same thing. That isn’t going to stop either.

So does it matter? No point worrying about what cannot be changed.

Like most things, there is always a good and bad side to any issue.

Tracking and watching and analysing behaviour allows better matchmaking between those of us looking for things and finding what we are looking for.

It allows us to know where we are, at the same time it allows others to know where we are. It allows us to keep track of what we are doing at the same time it allows others to do the same thing – banks, stores, telcos, advertisers, social media, police, councils and so on.

It allows anticipation. It allows offers. It allows targeted service. None of these are bad things.

The issue is the balance and the shared value in the relationship. 

I get something I want. The vendor gets something they want. As long as the exchange feels fair and we believe it is fair we probably don’t have much to worry about.

But I suspect there will have to be evidence provided at some stage to ensure this new relationship is fair and sustainable otherwise we will do what we are all good at and withdraw.

We will back off. We will walk away. Put Bluetack over the cameras on our devices. Encrypt messages. We will drop out. We will turn off. We won’t visit.

With vendor relationships the deal is obvious. It is commercial. With other vendors and brokers – government and agencies, the deal is less transparent or obvious at this time.

Most of the value is going their way. There is little coming in return. And some government agencies seem to be taking a hell of a lot, for little in return.

If this continues, we will choose to use other channels and the trust and sharing relationship with government will diminish.

It will sort itself out over time. Always does.

But ongoing relationships have to feel fair to continue. Or relationships break up. Divorce happens. Trust disappears.

And that is the real issue.

Shared value builds trust. Unfair relationships destroy trust.

It’s not just about money. In fact it is rarely only about money. It is about perceived value. My view of value is different to your view.

And the connection, conversation and collaboration starts with a shared understanding of what that means.

So who is watching us? Who is tracking us? What are they tracking? Is it accurate? Can we check it? Can we correct it?

Is anybody out there looking after our interests, acting as a trust broker?

Our accountant? Our lawyer? Our industry association? Our colleagues? Member of parliament? Our media? Our government?

The NSA, GCHQ, ASIO will continue to do what they do. We have no leverage on that score. Only the sunny, bright light of exposure and transparency.

Without the considerable courage of Edward Snowden, we wouldn’t even know the worldwide data hoovering was going on. Let alone the enormous scale of it.

What rules do they play by? Will we ever know? Are they accountable to anybody or has that particular genie flown out of the bottle and left town?

With commercial genies we can ask the same questions about transparency and accountability and expect an answer. That is one of the things that government can provide and one of the things we can expect them to provide because we have electoral leverage.

And it is in our national interest for government to provide some protection to our commercial organisations, their IP, business information and collective knowledge. That is what allows us to compete on the world economic stage.

And if we are all going to continue to engage as customers with commercial entities then they have to understand the true value of honesty, integrity and trust.

Look at what happened with the banks after the GFC. They are still struggling to be accepted as normal human beings again, even in Australia where they didn’t go anywhere near as far into rampant greed, scams, “rape, pillage and burn” as London and New York.

Do I believe that the big four Australian banks have my interests at heart today?

No. Of course not. They are a service industry that doesn’t.

It is remarkable how much time and energy they are putting into trying to rebuild the trust and engagement with customers, that they destroyed.

It will take a long time. And will require some considered public investment of social and nation building capital not just self serving advertisements. Some real “skin on the table”.

At least Telstra is honestly trying hard to connect with customers and still being commercial about it. No problem with that.

It would be a good start if the banks would invest in Australia in the same way.

Respect will go to those that add value to customers and share value across all business relationships. Professor Porter of Harvard Business School has defined this new paradigm as shared value. But it is a real thing.

And shared value is the next station along the line from Corporate Social Responsibility where all of our banks are stuck today. They just see social responsibility as the tax they have to pay to play.

That is a boardroom decision not a human decision (somebody with families and kids and friends and neighbours) and is not sustainable in this new shared-value world we live in. Thank Google for that.

Interesting times. And these genies are provocative and will continue to demand our attention for a long while.

- John Sheridan, March 2013.

John Sheridan is CEO of Digital Business insights, an organisation based in Brisbane, Australia, which focuses on helping organisations and communities adapt to, and flourish in, the new digital world. He is the author of Connecting the Dots and getting more out of the digital revolution. Digital Business insights has been researching and analysing the digital revolution for more than 12 years and has surveyed more than 50,000 businesses, conducting in-depth case study analysis on more than 350 organisations and digital entrepreneurs.

http://www.db-insights.com/

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Digital Business Insights: 2014 – the year of disruption

BETWEEN 2014 and 2017, Australia will haemorrhage thousands of full time, well paid jobs. They will disappear forever.

The car industry shut down with its related supply chain closures in the motor vehicle parts and accessories sector will push tens of thousands of skilled and semi skilled people out into the job market.

The end of the construction phase of mining industry projects in 2014 will result in thousands of project managers, engineers and construction workers chasing a diminishing number of jobs in other sectors.

Government cut backs and redundancies in Canberra and in other state governments will result in thousands of white collar workers moving into early retirement or possibly starting new business ventures.

High street retail closures will continue, caused by the growth of online retail and the related inability of smaller retailers to manage the new disruptive and highly competitive business environment. It is all too hard for many mum and dad small retailers and they will leave retail forever.

Full time, well-paid jobs will disappear forever in manufacturing, mining, retail, real estate, construction and government only to be partially replaced by a range of government sponsored infrastructure developments.

Digital disruption will continue to pummel all industry sectors. Sixty percent (up from 40 percent last year) of US CEOs worry about competition from new market entrants. And competition can come from anywhere.

Teleworking will increase steadily promoted by government and office lease vacancies will grow further. They will move from the teens to the 20s in Brisbane, Perth, Melbourne and even Sydney. Retail vacancies will follow the same trend.

Retraining for the new business environment will be critical.  But what are the new skills required and do the traditional vocational training facilities have the knowledge, vision and capability to train people to be successful in this new world?

No.

They can spend government money helping people create resumes and strategies for job hunting but their responsibility stops there. Tick the box and take the money from government, but push them out the door with the wrong skills, no hope and no ongoing support.

The real skills necessary to survive and thrive can’t be picked up quickly, and chasing permanent jobs in a new part time, contracting and self-employed world requires a major shift in attitude (herd animal to hunter) – too hard and too far for individuals used to 9-5 full time jobs.

Competition for full time jobs of any kind will become fierce. Even in the traditional full time space, contracts are becoming the new norm.

Job security? Forget it.

The biggest impact on Australia will be the drop in income levels as newly redundant workers move from high paying jobs to low paying jobs, if they can get any jobs at all.

Students moving from university into the workforce will face even greater competition. No experience competing with huge experience. Many will return to study for higher degrees but only postpone the problem.

The middle class will start to shrink. Australia will begin to mimic the USA with its 1 percent of super rich and the remaining 99 percent low paid.

The baby boomers are now starting to retire in droves, conserving their resources, downsizing and only spending where it suits them. Retired people save money and don’t spend as much.

Less money to spend will impact retail, personal and business services even further.

As interest rates slowly rise again, the housing market will be hit hard. Mortgage defaults will increase. The overall number of people able to buy property will fall further and the price of housing will drop. There aren’t enough Chinese investors to go around.

Independent contracting will grow. No job security or little job security means less borrowing and spending, and more saving where possible. Banks and other finance providers will wrestle with how to rate this new 'worker' and manage risk.

The nature of a job will shift from full time to permanently part time or ongoing contracts.

Unions will lose more members and become even less relevant. There is no role in confrontation with management when the result is company closure and layoffs. Unions will have to shift towards partnership with private and public companies, with the key focus on overall business success, for everyone involved.

Unions will retain a role with government and in academia but even there the emphasis must shift. Collectively employers and unions have to look at the big picture and the sustainable future.

Where is all this change and disruption heading? What is a job? What does employment mean? What skills do the new workforce need in the 21st century? How can people quickly gain new skills and accreditation? What role do TAFES, universities and RTOs have in this new world?

What are industry associations for? They don’t understand what is happening and look behind wistfully rather than forwards with 20-20 vision.

How can we use the internet and web based services in a more intelligent manner to support individuals in this new environment? Not based on the presentation of old world 20th century resources and information but really tailored to the new condition – starting with the customer and working back.

Employment growth will happen in aged care services (low paid), disability services (low paid), tourism (low paid), catering (low paid), infrastructure building (medium well paid), logistics (low paid), creative industries (medium well paid), ICT (medium well paid), agriculture (low paid) and health services (low paid).

The only room for real job growth is in startups. And value adding.

And for them to have any hope of success they will need support. Net job growth (full time, part time, contract, self employed) will come from startups.

We have to provide the right resources for startups to have more chance of success – the business intelligence, the mentorship and support, the connections and introductions, the export resources and support, the networks – both real world and virtual world.

The new disruptive condition and business environment is upon us. It isn’t going away. 2014 will be a shocking year. Shocks, but also huge opportunities. The two go hand in glove.

It will hit many people and industries hard. Government alone can’t manage this problem.

It requires cooperation, collaboration and sharing. It requires the putting down of political dogma and the acceptance that the only viable strategy is shared value.

Response has to start at the grass roots and it already has. Government’s role is to recognise and support any sign of fertility in this new arid and very challenging business environment.

Government must take the role of gardener. It can’t lead. But it must observe, recognise, identify and support success.

Then modify the conditions that it can control to support the new economic garden. Apply water, fertiliser and prune appropriately.

Government is too slow to lead and too clumsy. It has to get out the way of creativity, innovation and fertility but once firm and productive roots are down, support the growth.

It has to get out of the way, but not stay out of the picture.

And become more agile. A big ask, but not impossible.

Time to put down – “this is the way we have always done it” – and think anew.

The old way doesn’t work.

Vision. Long-term strategy. Action.

It should be an interesting year.

- John Sheridan, February 2014.

 

John Sheridan is CEO of Digital Business insights, an organisation based in Brisbane, Australia, which focuses on helping organisations and communities adapt to, and flourish in, the new digital world. He is the author of Connecting the Dots and getting more out of the digital revolution. Digital Business insights has been researching and analysing the digital revolution for more than 12 years and has surveyed more than 50,000 businesses, conducting in-depth case study analysis on more than 350 organisations and digital entrepreneurs.

http://www.db-insights.com/

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Accenture: six clear trends drive digital business power shift

THE days of innovative, technology-focused start-ups being the only market disrupters and growing faster than their larger, more established competitors may be coming to an end, according to a new report by Accenture.

Large enterprises are starting to take advantage of their size, skills and scale to transform into truly digital businesses.

The Accenture Technology Vision 2014 identifies six information Paul Daugherty, Accenture chief technology officer.technology (IT) technology trends that are enabling large enterprises to join those start-ups previously recognised as market disrupters in pushing the boundaries of innovation and taking advantage of digital technologies for competitive advantage.

The report finds leading enterprises are pursuing digital strategies that leverage mobility, analytics, and cloud to improve business processes, take advantage of real-time intelligence, expand the boundaries of traditional workforces, and transform the way data is managed and used.

“We’re seeing large enterprises – armed with the resources, scale and drive to reinvent themselves through digital transformation – reasserting leadership in their markets,” said Accenture chief technology officer, Paul Daugherty.

“Leading companies are adopting digital to drive their processes more effectively and transform how they go to market, collaborate with partners, engage with customers, and manage transactions. Digital is rapidly becoming part of the fabric of their operating DNA and they are poised to become the digital power brokers of tomorrow.”

The six IT trends identified as driving the digital power shift are:

Digital-Physical Blur – Extending intelligence to the edge:

The real world is coming online as wearable devices, smart objects and machines provide us with real-time intelligence, changing how we live and how businesses operate. This new layer of connected intelligence augments workforce capabilities, automates processes, and incorporates machines into our lives. For consumers, this provides new levels of empowerment, and for organisations, getting real-time, relevant data means both machines and employees can act and react faster and more intelligently in virtually any situation. In healthcare, for example, Koninklijke Philips N.V. is running a pilot Google Glass application that allows physicians wearing the display to simultaneously monitor a patient’s vital signs and react to surgical procedural developments, without needing to turn away from the patient or procedure.

The rise of the borderless enterprise:

 

Picture a workforce that extends beyond its employees, consisting of any willing individual connected to the internet. Technology now allows organisations to tap into vast pools of resources around the world, just as companies like MasterCard Incorporated and Facebook Inc. do through organisations such as Kaggle Inc, a global network of computer scientists, mathematicians, and data scientists who compete to solve problems ranging from finding the best airline flights to optimising retail-store locations. Channelling such efforts to achieve business goals is a challenge, but the opportunity is enormous: tapping an immense, agile workforce that is not only well-suited to solving some of today’s toughest business problems, but also, in many cases, is motivated enough to do it for free.

Data supply chain – Changing the way data is handled to put information into broader circulation:

Data technologies are evolving rapidly, but most have been adopted in a piecemeal fashion. As a result, enterprise data is vastly underutilised. Currently, just one in five organisations integrates data across the enterprise. To truly unlock data’s potential value, companies must start treating it more as a supply chain, enabling its easy and useful flow through their entire organisations, and eventually throughout their ecosystems, too. Companies such as Google Inc. and Walgreens Co. have adopted this approach by opening up APIs; more than 800,000 websites now use Google Maps data, and third-party developers are able to include the ability to scan barcodes from Walgreens’ prescription bottles into their apps to make it easier for people to refill prescriptions.

Hardware is back (and never really went away):

The hardware world is now a hotbed of innovation as demand soars for bigger and faster data centres. Advances in areas such as power consumption, processers, solid state memory, and infrastructure architectures are giving enterprises new opportunities to massively scale, increase efficiency, drive down costs, and enable their systems to perform at higher levels than ever before. As companies digitise their businesses, more and more will see hardware as essential to enabling their next wave of growth.

Business of Applications – Software as a core competency in the digital world:

Mimicking the shift in the consumer world, enterprises are rapidly adopting apps in a push for greater operational agility. According to Accenture research, 54 percent of the highest-performing IT teams have already deployed enterprise app stores, facilitating this shift towards simple, modular apps for employees. IT leaders and business leaders must establish who plays what role in app development in their new digital organisations, as pressure for change is driven by the business. They must also transform the app development process itself, in order to take advantage of new technologies quickly, support regular software iterations, and, ultimately accelerate business growth.

Architecting Resilience – ‘Built to survive failure’ is the mantra of the non-stop business:

In the digital era, businesses are expected to support the non-stop demands placed on their processes, services and systems. This has ripple effects throughout an organisation, especially in the CIO’s office where the need for ‘always on’ infrastructure can mean the difference between ‘business as usual’ and the erosion of brand value. Companies such as Netflix, Inc., which uses automated testing tools to deliberately attack its systems as a means to increase resiliency, are among today’s IT leaders. These companies ensure that their systems are designed and built for failure, taking advantage of modular technologies and advanced testing processes rather than designing to specifications.

“These key trends build on those we have seen over the past couple of years,” Mr Daugherty said.

“Last year, we declared that every business is a digital business, whether its leaders acknowledged that or not. Now, we see that digital technologies run through every facet of the highest-performing businesses.

“Looking at the shifts in technology and the impact they’re having on the strategies and operational priorities of organisations around the world, we believe there are tremendous opportunities for every C-suite executive to be a digital disruptor – to reinvent and redefine their business to create lasting competitive advantage.”

For nearly 15 years, Accenture has taken a systematic look across the enterprise landscape to identify emerging IT trends that hold the greatest potential to disrupt businesses and industries.

Accenture’s Technology Vision is developed annually by the Accenture Technology Labs. For the 2014 report, Accenture researchers and scientists developed hypotheses about information technology developments that they expect to have a significant impact on businesses over the next three to five years. 

Accenture also employed social collaboration techniques and crowdsourcing to solicit input and suggestions from thousands of its own employees. Other sources used for the report include trends identified by industry analysts, themes at conferences, academic literature, and Accenture’s original research into the characteristics of high-performing IT organisations.

Accenture is a global management consulting, technology services and outsourcing company, with 281,000 people serving clients in more than 120 countries. Accenture focuses on collaboration with clients to help them become high-performance businesses and governments. The company generated net revenues of US$28.6 billion for its fiscal year ended August 31, 2013. 

http://www.accenture.com/home.asp

www.accenture.com/technologyvision

#TechVision2014

 

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E-entrepreneurs are revolutionising everyone’s business landscape

THE E-ENTREPRENEUR revolution is coming to a business like yours and it will happen sooner than you are prepared for, if people like Glen Carlson have anything to do with it.

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Glen Carlson.

 

Mr Carlson is a leader in the new business of nurturing e-business entrepreneurs. His company, Key Person of Influence, has focussed since it began in London three years ago on the infinite potential of the service industry – and enabling its up-and-coming leaders.

He calls it “the entrepreneur revolution” and it comes to you from the other side of the world, or from a remote farm or, perhaps, from a suburban kitchen.

Mr Carlson is unusual in that he is one such modern-era, tech-led business entrepreneur who is actually in the business of assessing, nurturing and training entrepreneurship in others.

He describes the e-entrepreneur revolution as the third great shift in the world’s progressive culture of employment:

There was the agricultural revolution, when a man worked the land; then with technology came the industrial revolution and its multiplication of factories and machinery; and now, thanks to the internet boom, the world is in the grip of the entrepreneur revolution.

“Business used to be geographically constrained, now it’s not,” Mr Carlson said. “You can have a global business from your kitchen table.

“We live in a time when it is entirely possible to repackage and reposition our skills and expertise so that it is accessible to anyone who is looking for what you have to offer.”

Mr Carlson warned, of course, that success “doesn’t just fall into an inbox”. Just as in the physical world of small business, factors such as having the right thing to sell, an appropriate business plan, and a deep understanding of what you’re getting yourself in for all play a role.

“There is plenty to get excited about the role of tech incubators in the entrepreneur revolution,” Mr Carlson said. At age 32, he is CEO of a company that, taking its own advice, is currently spreading its influence across the globe and expects to quadruple its turnover in the next three years.

After starting and selling a series of internet-enabled businesses, mainly in the training sector, Mr Carlson and business partner Daniel Priestly founded Entrevo, an international training company operating in the UK, US and Australia. 

In recent years Mr Carlson has probably become best known as the CEO of the popular 40 week Key Person of Influence (KPI) Growth Accelerator Program, in which he and his team specialise in helping fellow entrepreneurs and business leaders become more valuable, visible and connected in their industries. /2…

“We like working with service based business owners who want to develop their skills and talents into a really great company,” Mr Carlson said. “They love what they do, and they want to be well rewarded for doing it.”

KPI helps these businesses implement global best practices through workshops, webinars, and a cloud-based learning management system which Mr Carlson said is used by prestigious schools and universities around the world. The KPI program is already operating in Melbourne, Sydney, Brisbane, London and Tampa (Florida), with expansion to Perth later this year and plans beyond for other cities in the US and UK. 

“World-renowned tech incubators have incubated some of the most successful web companies in the world,” Mr Carlson said.

“They started in a Petri dish of leadership, mentoring and resources. Those little tech incubators have spawned an internet revolution and that has spawned its own revolution in the service space.”

Mr Carlson practically works from a laptop in Port Melbourne and the odd café around town, forgoing the need to endlessly criss-cross the globe while rolling out training courses that give birth to e-businesses from the east coast of Australia, London and the US.

He’s both passionate and savvy about being at the forefront of this revolution and genuinely thrilled as he sifts through the ideas that people present to him.

“We modelled all those things that do well with tech incubators and applied it to the service industry – doctors, lawyers, financial planners, coaches, architects, pilots, personal trainers, horse massage therapists; any one delivering a service of some kind,” Mr Carlson said.

“We are training people across 50 different industries.”

But Mr Carlson warned that even in this unprecedented era, service industry entrepreneurs still needed the fundamentals of good business, including experience in their specialised fields, to seek success.

“The thing you absolutely need is enough experience in your industry to have an opinion, and to specialise with that,” he said.

“You need existing skills, talents, expertise; a track record doing what you do – you can’t be a newbie, this isn’t some magic way to success.

“This is about taking your existing skills and expertise and packaging them, then repackaging them, in such a way that they become more attractive to people and hence a lot more valuable.

“Plus, it’s very difficult to make something successful that you don’t really deeply love. It has to be close to your heart.”

He said in an era of dramatic technological change, never has there been such potential for a person who has a great business idea and practical expertise to easily reach the hugest market imaginable, “thanks, of course, to the internet”.

Mr Carlson is the keynote speaker at a series of Key Person of Influence events around Australia this month: Melbourne February 7, Sydney February 13 and Brisbane February 28. He is presenting alongside well-known business builders Michael Micalewicz, Andrew Grifiths, Tim Dwyer and Valerie Khoo.

http://www.keypersonofinfluence.com.au/

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Mobile tech drives collaboration between small businesses and their accountants

AUSTRALIAN small businesses will up the ante on cloud and mobile technology solutions in 2014 – and benefit from unprecedented collaborative opportunities with their accountants as a result – according to research by financial management system provider, Intuit.

Intuit APAC vice president and managing director, Brad Paterson said in 2013 there had been an “astronomical increase” in uptake of mobile and cloud technologies by Australian small businesses.

Mr Paterson said information technology (IT) upgrades and innovative software developments, driven by customer demand for more productive financial management solutions, will also be on the agenda for small businesses in 2014.

“With high expectations of productivity increases, nearly 40 percent of SMBs (small and medium businesses) are planning to buy or upgrade iPad and tablet technologies over the next year, with those businesses of 10 employees or more having an even higher planned adoption rate, according to the 2013 TechAisle Australia SMB Mobility Adoption and Trends report,” Mr Paterson said.

He predicted small businesses would be set to benefit from unprecedented access to timely data, professional advice and technological support with increasingly powerful cloud and mobile solutions facilitating faster, more collaborative ways of working in 2014.

While the trend was strong in medium and larger businesses, the action was at the SMB level.

“We’ve seen greater than anticipated usage of mobile devices by small businesses, with Australia now ranked second in the world for smartphone usage,” Mr Paterson said.

“According to a recent TechAisle study, telecommuting has also become the norm, with 72 percent of employees in smaller companies taking advantage of the latest mobility devices and working from home.

“In addition to access, small businesses and their trusted advisors including accountants and bookkeepers are also increasingly looking for ways to save time. Intuit’s 2013 research with 1000 small businesses in Australia showed that owners could save, on average, an hour each day by being able to complete business tasks on the go – this equates to an entire month’s holiday.”

Mr Paterson predicted 2014 would see increasing levels of collaboration enabled by cloud and mobile technologies and a deepening of the relationship between small businesses and accounting practitioners.

“Our customers tell us they love flexible, scalable online platforms and the sophistication of software which enables those with financial responsibilities to have access to their accountant’s expertise anywhere, at any time and from any device. As such, we are seeing the concept of having an ‘accountant in your pocket’ become a reality,” Mr Paterson said.

“The shift in the role of the accountant, from ‘number cruncher’ to trusted financial advisor, will only continue, meaning accountants will have to step up to the plate and differentiate themselves by offering value-added consultative services 1.

“Small businesses, accountants and bookkeepers also need software that simply works and is intuitive so application suites will have to integrate the products and services that address the entire workflow and enable better communication and collaboration.”

Mr Paterson said Intuit’s focus in 2014 would be to bring together small business and accounting offerings with the power of the cloud and mobile, rolling out a ‘virtual office’ solution to streamline the entire end-to-end financial process, and introducing the power that will enable Intuit to be the operating system, or platform, behind small business success.

“We believe the interests of our small business customers and their accounting practitioners are now one and the same – the focus is on time saving, growth and service,” he said.

“To thrive in this environment, they need solutions that are built from the ground up for a mobile environment and contain the same powerful features as their desktop counterparts. We knew mobile would lead with customers and we’ve been preparing for it.”

Paterson said that this year, more than ever, Intuit was set to put customers in the driver’s seat, enabling participation-driven innovation.  

“Customers will continue to drive innovation as we dramatically increase the number of updates to the Australian business,” Mr Paterson said.

“Partnering with bookkeepers, accountants, developers and industry bodies, we expect to see some really exciting growth and platform developments in 2014 and beyond.”

www.intuit.com.au 

 

[1]The Intuit 2013 Future of Accountancy Report found these services were being impacted by significant changes in the global business environment, online and mobile technologies, social networks and the rise of Gen Y and Millennial.

 

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Online shopping clicks into second wave of growth across Australia

ONLINE shopping in Australia is enjoying a strong second wave of growth, according to Swinburne University of Technology researchers.

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More Australians are stepping out to shop - after online research

 

More Australian consumers seem to be building internet browsing, purchasing and financial transactions into their everyday lives.

A study of online retail in Australia from 2007-13, part of the World Internet Project (WIP) reveals a consistent pattern of large increases in the number of online purchases made by Australian consumers, reaching an average expenditure of $2616 a year.

"After an apparent plateau between 2009 and 2011, our latest survey confirms that online shopping by Australian consumers grew strongly again between 2011 and 2013,” said Scott Ewing of the ARC Centre of Excellence for Creative Industries and Innovation and Swinburne University of Technology.

"The good news for Australian businesses is that local retailers are maintaining their share of this growth, as Australian consumers maintain their strong preference for shopping with domestically-based websites,” Dr Ewing said.

"Three out of 10 Australians now shop online every week, or more often, compared with two in ten New Zealanders and one in 10 Swiss.”

The mean value of monthly online purchases by Australians grew by 5.8 percent to $218 from 2011-13, while the actual number of internet purchases grew by 46.2 percent. Men are still the internet shopping kings, buying $229 in online goods a month, compared to women’s purchases of $204.

"There has also been a continued major upsurge in the number of Aussies using the internet for financial transactions,” Dr Ewing said.

"For example people making travel bookings online grew from 49 percent in 2007 to 73 percent in 2013, those paying bills grew from 43 percent to 72 percent and those purchasing event tickets from 36 percent to 65 percent.”

The latest survey also reveals renewed growth in Australians buying digital content – movies, books, music, games etc – online rather than in-store.

The WIP is conducted in 30 countries round the world to compare internet use and behaviour. In Australia it consists of an annual survey of 1000 people aged 18 or older and has been running since 2007.

"In 2007 we found 73 percent of Australians were using the internet,” Dr Ewing said.

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Scott Ewing is tracking online shopping behaviour in Australia.

 

"This grew to 81 percent in 2009, to 87 percent in 2011 and in 2013 it reached 91 percent.

"So internet shopping in this country is growing for two reasons – first because more people are using the internet, and second because more internet users are purchasing online. It is important to bear these two factors in mind when considering the growth in online activity.”

To gauge how the internet has affected businesses, in 2007 around 40 percent of Australians never looked for product information online – but by 2013, this had dropped to 16 percent.

"Basically, five Australians in every six are now seeking information about intended purchases online before they buy, and this underlines the importance of having an internet sales presence.”

At the same time more than a quarter of the population is buying something online at least once a week, Dr Ewing said. About 69 percent look up items online before buying at the store.

Buying online is still strongly driven by price, consumers say – but they continue to find it hard to assess product quality online.

The proportion of internet users who shop online in Australia is very similar to comparable countries. Australia, New Zealand, Sweden and the UK have almost identical rates of online shopping at 85, 86, 85 and 87 percent respectively. This compares with 76 percent of Americans and 68 percent of Swiss.

Travel is an area where the internet plays a big role with 74 percent of Australians making an online booking at least once a month, while 79 percent now pay their bills online. However one area of online activity that continues to languish is buying stocks and shares – only 8 percent of people use the internet regularly for securities trading.

While 87 percent of Australians use the internet to compare prices, fewer than 13 percent use it to sell things regularly. Also 79 percent expressed a strong preference for buying goods from an Australian website.

Resistance to buying digital content online is decreasing, with consumers indicating they are more prepared to buy music or newspapers online: a slim majority are now prepared to download music but 61 percent are still opposed to online newspapers.

Full report at: http://www.cci.edu.au/sites/default/files/retailreport2014.pdf

http://www.swin.edu.au/

 

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