The Future of Payments Everywhere Commerce Insights into online shopping in Australia and where to from here. July 2014

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1 The Future of Payments Everywhere Commerce Insights into online shopping in Australia and where to from here July 2014

2 Online shopping has become the norm for the vast majority of Australians. We can now shop everywhere, anytime

3 Message from Stephen Karpin, Visa s Group Country Manager for Australia, New Zealand and South Pacific The past few years have seen an explosion of online shopping in Australia. The online retail market has grown at 12.6 per cent year on year with $14.7 billion spent on online retail in the year to December , compared to a 4.6 per cent growth in overall retail turnover 2. Despite this, online shopping only accounts for the equivalent of around six per cent of traditional retail spending 3, so the potential for future growth is enormous. Online shopping allows people to shop outside of the traditional confines anywhere, anytime. In today s fast paced and mobile world, this is a very important consideration. People are now shopping online via a variety of platforms computers, tablet devices and mobile phones. Mobile payments have been a huge growth area in online shopping and this trend is set to continue. The successful future of ecommerce is dependent upon an easy payments system one which is secure, convenient and simple. To this end, Visa has introduced Visa Checkout to simplify online shopping across any device. This report examines online shopping trends in Australia and people s attitudes towards it. Aimed to better understand the way people think about online shopping, the research has provided some interesting results. The results show that how people shop and why is often determined by time and ease of access. Security however remains an issue for many and delivering easier ways to transact online must also be met with the highest security standards. I hope you find the results useful for future planning given this sector is only set to increase. Stephen Karpin Visa Group Country Manager, Australia, New Zealand and South Pacific About the research Research was conducted by UMR Research Pty Ltd. Fieldwork was carried out between November A nationally representative sample of 1,000 people were interviewed online, all aged 18 years and over. 1 NAB Online Retail Sales Index Dec Australian Bureau of Statistics, Retail Trade Figures, November 2013, seasonally adjusted, compared to November NAB Online Retail Sales Index Dec 2013 The Future of Payments Everywhere Commerce Insights into online shopping in Australia and where to from here

4 Online shopping Australians are early adopters of technology and among the top digital consumers in the world. Web-enabled mobile devices have changed the way we live. We can now shop everywhere from anywhere and at anytime. This has meant an increase in the past few years in online shopping. Australians are shopping online both domestically and also overseas. Main findings Online shopping has become the norm in Australia with the vast majority of Australians (92%) having shopped online The peak time for online shopping is between 5-9pm in the evenings at home and also on the weekend with most people using a PC or laptop to do their online purchasing Travel and entertainment are the two most shopped for items online by Australians Online shopping has become the norm in Australia with the vast majority of Australians (92%) having shopped online 31 per cent of people prefer shopping online and 35 per cent say they want to shop more online 88 per cent of Australians are satisfied with being able to shop online 24/7 when it suits them.

5 Who shops online? Shopping online has become an accepted way to shop. Younger males are most likely to enjoy shopping online as opposed to shopping in a store. Australians shop online both at home and at work and also on their way to work. 92 per cent of Australians have shopped online and most online shopping is done at home Young people aged between years are most likely to enjoy shopping online. Older people, aged over 50 years, are more likely to find shopping in store more enjoyable Those aged between years of age would ideally like to do more shopping online Half of all Australians shop online at home, either regularly or occasionally, compared to 29% at work Apart from at home and work, Australians regularly shop online while watching TV (12%), in bed (9%) and while commuting (5%) Of those who commute to work by bus, 31 per cent said they regularly or occasionally shop online, while 34 per cent do so on the train. Online shopping on the commute is higher for those who use public transport 17% 14% 13% 21% 6% Bus Train Car 13% Have you shopped online while commuting to work? Regularly Occasionally The Future of Payments Everywhere Commerce Insights into online shopping in Australia and where to from here

6 Shopping online and devices used 3% 7% 90% 36% 31% 32% 60% 14% 26% 61% 26% 12% Don t have this Have this but don t use to shop online Shop online using this How do people shop online? People like the ease and convenience of online shopping and they want to shop on the go (using mobiles, tablets) 24/7. However the traditional PC and laptop still remain the most common way to shop online. Proportion who own this device and use it for online purchases Nine out of ten people shop online using a PC/laptop Mobile phones are the second most popular device to shop online followed by tablets (ipads) and then ipods/kindles. Who uses smartphones and tablets for shopping online? Parents of dependent kids Household incomes over $100K People who commute on public transport Younger consumers are more likely to use smartphones and tablets for online purchases with the years olds the highest users followed by the year olds. Smartphone Tablet years 63% 39% years 50% 40% years 12% 14% 70+ years 3% 6%

7 Who is the typical online shopper? People who already shop online want to do it even more. A key audience for online shopping are people described as middle families. These families make up nearly a quarter of Australians who shop online a lot and want to do it more often. Middle families typically have dependent children; are aged under 50; are in full-time work or own a small business; have a household income over $100K a year and are paying a mortgage. 38% of those with dependent kids Higher income 31% earning >$100k 37% of those in full time work 37% of small business people 33% of those paying a mortgage 33% of those aged under 50 The Future of Payments Everywhere Commerce Insights into online shopping in Australia and where to from here

8 What do people buy online? People are buying a wide variety of products and services online. Travel and entertainment are most commonly purchased online, followed by clothing and footwear. In the past six months, 53 per cent of people have purchased entertainment online as opposed to 35 per cent offline. Time of day Electronic goods, household items and food and beverage are the next most commonly purchased products online. 6am to 9am 5% 32% When do people shop online? 9am to 5pm 22% 64% 5pm - 9pm is the most popular time to shop online for the majority of people followed by 9am-5pm and 9pm until midnight 5pm to 9pm 25% 57% Five per cent of people shop early in the morning (between 6-9am) 9pm to midnight 14% 38% A quarter of people shop online regularly on weekends and a further 61 per cent shop occasionally on weekends Midnight to 6am 5% 15% Regularly Occasionally Young people are again more likely to shop online while commuting with one in three aged between years shopping occasionally or regularly on the way to and from work. Have you ever shopped online during these periods...

9 Issues with shopping online Security is the biggest issue for online shopping. People will cancel an online transaction if they are not convinced they are dealing with a secure website and they are frustrated with having to type in shipping, billing and account details for every online purchase. 64% of people avoid online shopping when they feel uncertain about the security of a particular website. Older females are most likely to avoid online shopping for this reason 44% of people are frustrated with the large amount of detail required to buy something online. Over half of young people aged between years find entering shipping, billing and account details at the checkout a deterrent to ordering online More than one in three people (37 per cent) have walked away from an online purchase because it was too hard and 30 per cent have abandoned an online purchase because they could not remember their password Improving the online shopping experience Opportunities to improve the online shopping experience are significant. Most Australians now shop online, and they are doing so across multiple devices. But people want their online purchase experience made simpler. Nearly half of year olds, and 40 per cent of year olds said they would buy more online if the checkout procedure was simpler. People are very security conscious and on the whole they want to ensure their payment details are secure when shopping online. Younger people feel more comfortable with security and online shopping. Satisfaction for sharing card information with online stores is highest for the year old age group at 60 per cent, followed by 55 per cent for the year olds; 41 per cent for the year olds and 26 per cent for those aged over 70 years. The Future of Payments Everywhere Commerce Insights into online shopping in Australia and where to from here

10 Visa introduces Visa Checkout to simplify online shopping on any device As Australians embrace a more mobile, digital way of life, the Australian payments system will adapt to offer greater convenience in the places that Australians want to shop, especially online. One way to make the online shopping experience easier is by enabling online checkout with a single username that can be used across multiple merchant websites. Visa Checkout is specifically designed for shoppers who prefer to use their Visa card online and want a simple, streamlined way to pay no matter what device they are using. For online retailers, Visa Checkout offers a simple implementation process, and a way to provide shoppers with a an easy checkout experience that does not require them to leave the merchant site. Leading banks and financial institutions will also be able to enroll customers directly through their websites. Visa Checkout can be accessed via PC, smartphone or tablet, with personal account information protected by layers of security within Visa s industry-leading network. Consumers can load any major payment card brand into the service and there is no fee to enroll or make purchases using Visa Checkout. Find out more at

11 Disclaimer: The information and recommendations are provided AS IS and intended for informational purposes only and should not be relied upon for operational, marketing, legal, technical, tax, financial or other advice. When implementing any new strategy or practice, you should consult with your legal counsel to determine what laws and regulations may apply to your specific circumstances. The actual costs, savings and benefits of any recommendations or programs may vary based upon your specific business needs and program requirements. By their nature, recommendations are not guarantees of future performance or results and are subject to risks, uncertainties and assumptions that are difficult to predict or quantify. Assumptions were made by us in light of our experience and our perceptions of historical trends, current conditions and expected future developments and other factors that we believe are appropriate under the circumstance. Recommendations are subject to risks and uncertainties, which may cause actual and future results and trends to differ materially from the assumptions or recommendations. Visa is not responsible for your use of the information contained herein (including errors, omissions, inaccuracy or non-timeliness of any kind) or any assumptions or conclusions you might draw from its use. Visa makes no warranty, express or implied, and explicitly disclaims the warranties of merchantability and fitness for a particular purpose, any warranty of non-infringement of any third party s intellectual property rights, any warranty that the information will meet the requirements of a client, or any warranty that the information is updated and will be error free. To the extent permitted by applicable law, Visa shall not be liable to a client or any third The party Future for any of Payments damages under Everywhere any theory Commerce of law, including, Insights without into limitation, online any shopping special, consequential, in Australia and incidental where or to punitive from here damages, nor any damages for loss of business profits, business interruption, loss of business information, or other monetary loss, even if advised of the possibility of such damages.

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