So where is the Australian digital market at the moment and what does the future hold?
Big questions. I needed to talk to an expert.
It was time to meet Alex Asigno, Search Director at Match Media (an award winning independent strategy agency) to find out. Alex moved over to Australia from iCrossing in the UK five years ago, and now calls Sydney his home.
So firstly, what’s Alex noticed about the market during his time here?
“Australia being behind is a myth – the same people are here, so the same expertise is here. We’ve got the same tools and Google’s algorithm is the same wherever you are. The only difference is smaller spend.”
So besides the spend levels, what’s the difference?
Well as mentioned by David and by Jon, it seems the main difference is the way people shop over here. Echoing Daniel, Alex explained that delivery options are often very slow and expensive. Logisitcs and shear scale of the country are responsible for this, as are comparatively high salaries.
It’s cheaper and sometimes faster to ship in from overseas (although Alex added that this is changing – ASOS now offers two day delivery options and astonishingly, Iconic now offers delivery within 3 hours of ordering to those in Sydney. Impressive). Gerry Harvey is lobbying to remove the GST exemption on imports. Even with this 10%, it’ll still work out cheaper to buy from abroad.
It’s something of a badly kept secret over here that customers can haggle on price with one of biggest retailers in the market. Stores would rather negotiate on price than lose trade and this includes matching prices online, despite much higher running costs (sometimes to extreme lengths) – “When we bought the white goods for our house, we actually paid below the cost price” laughs Alex. Worth trying your luck in DFS next time you’re there.
The good but it that there’s a real appreciation for lifetime customer value here, even if this does mean shops selling at cost. Customers are presented with a choice – pay more with delivery costs and wait to receive it or go to store, have it immediately and for the same price as online or better. So why shop online?
Online doesn’t just drive ecommerce trade, it also drives in store behaviour. Lack of investment in ecommerce tracking means that determining ROI is much more difficult, so there’s a focus on proving this link – especially given that Adwords CPC in Australia is higher than just about every other country in the world (direct life insurance AU$210).
“For sites which don’t have ecommerce we have to do some pretty advanced analysis to justify increasing spend” comments Alex “To my knowledge the econometric modelling we’re doing is as exciting and as advanced as anything happening in the UK. We’ve done some great work in attributing online behaviour and influence to in-store footfall and spend.”
This is going to put them in pretty good stead as the market continues to advance. Cracking the link between online and footfall is some of the biggest retail groups in the UK are yet to crack. The only missing piece here is the investment, but it’s coming as retailers and ecommerce brands alike flock over to Australia. When the market advances, it’s going to do so quickly.
So does Alex plan to come back to the UK?
“I planned to come here for a year like most Brits” he begins, “But I can’t imagine moving back now. Australia is awesome and there’s so much to take advantage of, aside from the weather and the stereotypical icons.” And that’s not to mention the rate of growth and the potential in the digital market over here (more potential than you could shake a didgeridoo at).
* Probably the worst pun in my blog to date (sorry Alex)