Australians spend less, more often in online shop surge

Baby boomers have taken to online shopping in droves while younger shoppers are cutting back amid cost-of-living pressures.

An increasing number of parcels are also heading to regional and rural areas, fuelled by population growth since the COVID-19 pandemic began, according to Australia Post’s online shopping report.

There was an 18 per increase in online shopping activity in remote and regional Australia between 2019 and 2023.

Baby boomers increased their spending online by seven per cent in 2023, compared to the previous year, splurging almost $1 billion extra with an average purchase of $109.

But despite cutting back during the year, millennials still spend the most, paying more than $22 billion for online purchases.

Generation Z shoppers pared back their shopping more than any other cohort amid soaring inflation, shedding 11 per cent of their online spending compared to 2022.

There was a slight increase in spending among Gen-Xers, who spent a combined $17.5 billion online.

The average spend across all cohorts fell to $98, but the number of overall purchases increased as people made smaller, more frequent buys.

Retailers were also hit by increased supply-chain costs, which led to 43 per cent raising their free-shipping thresholds and some shifting costs of returning purchases to the customer.

Australian consumers were becoming more reliant on online shopping with eight out of 10 households making an online purchase in 2023, Australia Post eCommerce manager Gary Starr said on Monday.

Increasingly popular end-of-year sales events led to nearly 100 million parcels being delivered in November and December alone.

“The success of sales events like Black Friday and Cyber Monday ultimately contributed to Australia Post achieving its biggest e-commerce peak period ever,” Mr Starr said.

Communications Minister Michelle Rowland said Australia Post played a significant role in enabling e-commerce and it needed to modernise in order to deliver more parcels.

The Commonwealth-owned postal service has flagged a need to shrink its retail network as it continues to suffer losses in its letters business, offset by record parcel deliveries.

A next-day delivery service operating in Melbourne, Sydney, Brisbane and the Gold Coast is expected to be expanded following strong uptake as part of broader plans to modernise, Australia Post chief executive Paul Graham said.