What’s in store for retailers in the battle for survival, success and supremacy?
For retailers across Australia, this year is pivotal. Intensifying global competition, ongoing economic pressures and evolving consumer behaviours are reshaping the e-commerce landscape, forcing retailers to adapt and evolve.
Delivery – once considered a back-end operation – has become a strategic differentiator influencing customer acquisition, retention and profitability.
According to data from Shippit, the recently concluded peak season saw Australian consumers loosen their purse strings, with the average value of online purchases soaring by 33 per cent from $98 on average during the whole of last year to $130 during the peak season. But while it’s unrealistic for retailers to expect peak levels of spending to persist, what are the trends, challenges and opportunities that businesses will face this year?
Shippit’s Commerce Delivery Report sought to shine a light on the most pressing issues, drawing on data and insights from some of the industry’s defining retailers and e-commerce thought leaders, including Brauz, Descartes Peoplevox, Convert Digital, Intersport, Rebel Sport and APG & Co. Here’s what it found…
Carrier challenges will persist, driving the need for diversified networks
Rising labour costs, fuel price volatility, and ongoing capacity constraints will continue to impact carrier reliability. Smaller carriers, in particular, will face working capital pressures, making it essential for retailers to build flexible, multi-carrier shipping strategies to mitigate risk and maintain delivery consistency. With delivery reliability significantly impacting customer retention and lifetime value, this must be a key focus for retailers.
Rising acquisition costs will intensify the focus on checkout conversion
As digital advertising costs soar, driven by aggressive bidding from global competitors like Shein and Temu, retailers must extract more value from each website visit. Conversion rates are critical. For example, too many retailers today inflate delivery estimates so they can over-deliver and exceed customer expectations. However, with the average delivery estimate (5.6 days) more than double the actual delivery times (2.2 days) according to Shippit data, this is hurting conversion. Retailers must use real-time data to inform accurate delivery timelines that enable them to boost conversions and meet delivery expectations.
Delivery estimates aren’t the only influence on conversions, though. For Rebel Sport, a key focus this year will be improving and personalising the online experience using CRO. Likewise, omni-optimisation is a key focus in its mission to provide a seamless customer experience regardless of the channel used to shop, according to Celine Sommacal, e-commerce operations manager.
Fast, free, and reliable delivery will be key drivers of customer loyalty
With consumer expectations continuously shaped by e-commerce giants – such as Amazon, which recently increased its local revenue by a fifth to $7.7 billion – delivery performance will directly influence repeat purchases. Inconsistent shipping experiences will erode trust, while retailers that invest in reliable delivery, proactive communication, and post-purchase engagement will build stronger, more resilient customer relationships.
Consumers in Australia will gravitate towards retailers who can consistently provide quick, reliable and transparent delivery. While speed is critical, reliability is paramount for APG & Co. Reliability is “non-negotiable” according to Carina Micheal, Group Head of Technology and Digital, who said, ultimately, their customers prioritise optionality and flexibility.
Faster deliveries will fuel higher return rates, demanding smarter logistics
Instant gratification drives impulse purchases, but it may also increase return rates, placing greater strain on logistics networks. Retailers must balance speed with sustainability by leveraging predictive analytics, improving product descriptions, offering tiered delivery options, and optimising fulfilment strategies to manage return volumes efficiently. For instance, providing same-day delivery for premium customers while offering standard shipping for budget-conscious shoppers can balance speed with efficiency.
Consolidation and centralisation will define logistics success
Retailers that streamline operations through centralised fulfilment, automation, and shared logistics infrastructure will gain a competitive edge in speed and efficiency. Without scalable logistics, businesses risk falling behind as larger players optimise for cost-effective, high-speed delivery.
This is a key focus for retailers like Intersport. Ben Wapling, head of marketing and digital, says that by leveraging their stores as fulfilment hubs, they can improve delivery speed. However, because it also adds complexity to inventory management, it makes transparency and proactive communication critical.
Just as this year is a critical year for the industry, the weeks ahead are especially so as retailers reset and re-evaluate post-peak season and build into the year. However, while uncertainty persists, our platform, data and assets like the Commerce Delivery Report exist to help retailers like you navigate the months ahead and thrive in the battle for survival, success and supremacy.
About the author: Rob Hango-Zada is co-founder and co-CEO of Shippit.
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