ECommerce powers Australian business through COVID-19, ahead of record $4 billion peak season

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Australian businesses that invested in eCommerce have been buffered from the impacts of COVID-19 compared to those that didn’t, according to new research by Deloitte Access Economics.

The research, produced in partnership with Australia Post, shows that while revenue fell by up to 67 per cent for some industries at the height of the pandemic, the shift to additional online activity saw non-store revenue for the average small businesses increase by between $105,000 and $708,000.

The positive impact of eCommerce from March to August 2020 also included:

  • Helping 73 per cent of businesses to retain employees
  • Allowing 61 per cent of businesses to keep operating through the crisis
  • Assisting surveyed businesses to limit overall revenue losses to 7 per cent, despite in-store revenues falling by 21 per cent
  • Increasing non-store revenue by 17 per cent for small businesses with up to four employees and by 23 per cent for businesses with up to 19 employees

The findings come ahead of the upcoming Christmas peak season and what is expected to be the largest eCommerce event in Australian history, generating $4 billion in spending or 25 per cent higher than last year.

Australia Post Group Chief Executive and Managing Director Christine Holgate said the research reaffirmed the unprecedented demand Australia Post had experienced through COVID-19.

“We have seen eCommerce accelerate through this pandemic, with Australia Post providing a valuable lifeline to many businesses, as our people work tirelessly to help deliver the additional $4.2 billion in online spending activity,” Ms Holgate said.

“Australians are embracing home delivery in record numbers and this analysis shows that over the next 12 months home delivery is expected to remain 25 per cent higher than pre-COVID levels. That is a significant challenge for us as the engine room of Australian eCommerce, but one we are preparing for.”

Minister for Communications, Cyber Safety and the Arts, the Hon Paul Fletcher MP, said the Deloitte analysis highlighted the role Australia Post had played in driving economic activity through a trying period.

“Small businesses have done it tough this year and Australia Post has provided many with a critical connection to customers and communities right across the country,” Mr Fletcher said.

“By focusing on the opportunities of eCommerce, businesses say they have been able to protect not only their bottom line, but the livelihoods of millions of Australians who rely on our business sector for employment.”

Deloitte Access Economics partner John O’Mahony noted that while 51 per cent of businesses expect economic recovery from COVID-19 to be at least 12 months away, there are three areas of focus for businesses in the months ahead.

“COVID-19 has changed the way Australians shop with an estimated 45 per cent of purchases set to be completed online in the future. Business looking to set themselves up for long-term success should look to increase digitisation, improve their supply chain resilience, and redesign their business strategy,” Mr O’Mahony said.

The report, Australia’s eCommerce revolution: how it saved businesses in Covid-19 and future strategies to thrive, was commissioned by Australia Post and produced by Deloitte Access Economics. The full analysis is available at auspost.com.au/publications.

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