March 4, 2013

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Online retail in Australia shows no signs of abating. But, asks 
Mitchell Oakley Smith, can a country so small sustain such growth? 

Nick Robertson, the CEO of online retailer ASOS, carries with him a heat map of the world, the hot spots, so to speak, indicating sales traffic. Naturally, given the company is London-based, the UK appears brightest, but beyond a twinkling throughout Europe and in the US, the world remains in relative darkness, similar to the maps indicating night time on long-haul flights. That is, of course, if you don’t cast your eyes south to Australia, and until a few years ago, what international retailer did? There, beneath the equator and nearly falling off the map, the country lives up to its sunburnt reputation, burning brightly in the middle of the ocean.

When Queen of the Wrap Dress Diane Von Furstenberg visited Sydney in late October, she said to the Sydney Morning Herald: “What I love about Australia, it’s the last frontier, it’s the frontier of hope.” With the western world all but collapsing economically, perhaps the big island does represent some sort of hope, which seems rather odd considering what a small population inhabits the vast continent in contrast to, say, Europe. “It’s fair to say that it has taken us by surprise,” says Mr Robertson of the sheer growth in ASOS’ Australian sales, the country its second biggest market outside of the UK. “We knew there was opportunity, but it has blown us away.” In response, the company established an Australian office, the first of its kind in the world independent to its British headquarters, and an Australian-specific website, with local currency, sizing and product tailored to seasons and national days. Free shipping was introduced in January of 2011, which, Mr Robertson explains, is when things really began to kick off. 

ASOS isn’t the only online retailer to see the benefit of investing down under. As Ian Tansley, managing director of MrPorter, the men’s division of leading luxury womenswear site Net-a-porter, explains: “Australia is a very significant market for us which continues to see strong growth year on year.” While ASOS largely stocks its own in-house brand, as well as collaborative capsules, Mr Porter prides itself on a stable of over 170 established luxury and designer brands rivaling most of the world’s department stores, many of which aren’t available in Australia or are so via small wholesale channels. 

Doesn’t this in itself pose a challenge for northern hemisphere-based retailers: selling seasonally appropriate goods to customers throughout the world, particularly Australia with its distinct lack of seasons? Annette Burke, ASOS head of PR, explains that Australian consumers aren’t all that different from British. “There’s no difference in the appetite for fashion in the two countries,” she explains. “You don’t just want beach product [in Australia], and year round we sell products relevant to any market, regardless of climate.” As Mr Robertson adds: “That’s the difference in our model. A [retail] store will have a primetime for beachwear, and then push that to one side for the rest of their seasons, but with one big warehouse we can carry it and every other season and style all throughout the year.” 

This, the company concludes, is simply a matter of digital accessibility. If a customer sees something online, they’ll want to buy it, no matter if it’s a lambskin-lined coat in the height of summer. Mr Tansley says the key to succeeding in what is now a global market is to cater to a global audience. “We buy into our designers’ collections with every audience around the world in mind, and offer a cross-section of product from collections year-round. No matter where you live, it’s about global style today.” But does the ease of shopping online, and the accessibility of product offered by retailers such as Mr Porter and ASOS, negate the need to shop in-store? The effect of online retail on traditional bricks-and-mortar is evident in Australia, and with many Australian retailers slow to develop competitive technology – national department store David Jones only launched a comprehensive online store in November 2012 – it stands to reason that local consumers should look abroad. As Ms Burke notes, Australian consumers are the most engaged in the world as far as ASOS social media platforms. “People have underestimated that before.” 

When we spoke, Mr Robertson and Ms Burke were in Sydney for the launch of the In Your World campaign, a preview of the brand’s spring/summer 2013 collection exclusively for Australia, allowing local customers to shop the collection and additional capsule collections before the rest of the world. In promoting this, ASOS held a series of events, the first time it has held consumer-focused events in the world, open to the public via registration on its website and Facebook. In total, according to an ASOS spokesperson, over 10,000 people applied to attend the Sydney events, with nearly 80% of them registering via Facebook. The week following the In Your World events saw 165,000 Australians ‘like’ ASOS Facebook page, with its Twitter base growing 472%. At last count, David Jones’ Facebook page had the same number of followers as ASOS gained in that single week. 

Not all local businesses are being trumped by the likes of their British competitors. As this journalist noted in Wish magazine in early 2012, 2008-established online retailer The GrandSocial stocks more than 8000 products from nearly 100 Australian apparel and accessory brands, with sales quadrupling to $1.8 million in three years. In late 2011, The Iconic, which similarly stocks a cross-section of Australian labels, launched with a considerable marketing campaign on par with ASOS. The Iconic matches prices of physical retailers and tailors sales opportunities for Australian business, such as in 2012 when it live-streamed shows from Australian Fashion Week with the products available for purchase on its website in real-time. Cheekily, when one types ASOS into a Facebook search, The Iconic appears before it as a sponsored link. 

Can an industry as large as that of continually growing online fashion be sustained in a country as small as Australia, and beyond this, can both international giants and independent local start-ups co-exist? In truth there’s room for both. “The challenge,” Mr Robertson explains, “is how to serve fashion in new, continually evolving formats,” such as the smart phone, which has fast grown to account for 20% of ASOS' digital traffic. “We have to ask ourselves: how are our customers using our site. It needs to be faster, easier, more adaptable than ever before, and with our particular demographic spending more and more time on their phones, we can’t afford not to.” As Mr Tinsley adds: “it’s about combining content with commerce with innovation so as to offer the customer amazing service 365 days a year.”

Artwork Anna Pogossova