Australia’s entrenched e-commerce platforms poised for industry disruption
Australia’s e-commerce boom has given rise to a healthy ecosystem of online shopping merchants commanding a sizable user base of local consumers – many of whom managed to weather the pandemic by riding a surge of digital sales. Observers may have expected that this would give rise to a competitive playing field of e-commerce platforms offering attractive service pricing and features, but the opposite has in fact occurred. Many business owners now face very few cost-effective alternatives providing the enterprise-level functionality they need.
According to Jonathan Levy, country manager for Shopline – an established player launching into the Australian market at a significantly lower price point than the traditional platforms – the problem for merchants is that, without a better alternative, they are wedded to their current platform. These platforms continue to increase fees with no incentive to respond to their clients’ businesses with improved functionality and new features, effectively putting most merchants in ‘maintenance’ mode.
For Shopline, this signals a prime opportunity for a mature, feature-rich platform to come into the market at a fair price with advanced functionality – in a way that others charge additional fees for.
“Platforms have two real levers to increase their revenue”, explains Levy, “one is to increase their merchant base, and the other is to increase their SaaS and services fees. With the market conditions as they are, they have been forced to increase prices to boost their average recurring revenue per user, as new merchants entering the market have slowed. While that may hurt many retailers and it may damage their perception in the market, they are relying on the fact that there are no alternative solutions”.
With business costs being one of the biggest challenges facing companies looking to launch or expand their online presence, it’s perhaps surprising that many of the most popular platforms have pricing structures that are getting higher and more aggressive, leaving many users struggling to keep up. This is particularly concerning at a time when businesses are under pressure and cost control is critical, and underscores the growing need for alternative solutions that can provide businesses with the functionality they need to compete – without requiring them to pay for expensive plans and features that should be included as standard.
Businesses relying on e-commerce to survive are demanding platforms with greater flexibility and value for money, which should be prompting providers to redefine what is essential and what should be paid for. As e-commerce continues to evolve, merchants will need to stay up to date with the latest trends and technologies to remain competitive and successful, and the platforms they trade on should be making these changes accordingly – especially as retailers struggle to meet shifting consumer expectations.
“The problem is that their margins are being squeezed with increased fees, as with every new feature that they need, there’s an additional fee attached,” says Levy. That’s why with all our plans, those functions that are currently feature-gated on other platforms are accessible to all merchants. This is because we see that retailer marketing costs are also going up while their ROI from the Google and Facebook ad networks are not as attractive as they once were. Clearly, merchants of any size need tools such as memberships and loyalty and affiliate marketing readily available to deploy. They need a plan that includes all the features we know contribute to sales, such as automation, loyalty programs, affiliate marketing, multi-layered discounts and in-store POS, at an affordable price.”
Replatforming does involve some costs – although Shopline’s solution is based on technology that simplifies a switchover, minimising that outlay – but small operators without enterprise-standard online stores are going to find competition increasingly difficult. Features such as product variation (capable of dealing with precise distinctions in product details), complex discounting, a high-performing site, multi-store management, flexible payment providers, membership programs and membership discounts, localised pricing and flow in automation are essential in capturing good SEO pickup and high conversion rates.
“Shoppers are more sophisticated today and are looking more for value,” says Levy. “They look for high-quality, trustworthy websites. They expect responsiveness, memberships and reviews to reinforce the fact that what they are buying is going to be high quality. They expect a seamless experience, online and offline. So for merchants looking to work with any e-commerce SaaS provider, it’s essential to set up all the features you need to capture the confidence of the consumer.”
If you’re a retailer looking to upgrade your e-commerce platform – or a marketing agency interested in working with a well-resourced, emerging industry player – check out https://au.shopline.com/.
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