The Australian eCommerce market is set for a dynamic evolution in 2024

Consumers will be even more selective, payment flexibility and innovation will be vital, and new tools to boost online security will gain momentum.

13 February 2024

2023 was another turning point for digital commerce. Following an earlier pandemic-induced surge, total online spending had climbed 5% year-on-year to September 2023.1 In November and December alone, 7.5 million Australians shopped online, marking a new record.2

Looking more closely, the drivers of digital activity reflect the circumstances and preferences of Australian consumers. For one, most Australians changed their spending habits amid cost of living pressures. Most adopted deal-seeking behaviours3, helping explain why cyber sales like Black Friday and Cyber Monday set new records4.

However, spending is only part of the picture. Last year, consumer expectations of their digital customer experience also reached new heights. The CommBank Consumer Insights Report (September 2023) showed that 85% expect technology to enhance purchasing processes and personalisation, with 64% indicating that data security and control are a must-have to purchase.

The momentum behind online spending, value and convenience-driven shopping choices, and demand for seamless and secure purchasing isn’t slowing down. In fact, these are helping set the stage for the next wave of ecommerce innovation.

As we enter 2024, we anticipate an acceleration of existing consumer and ecommerce trends and the emergence of new ones. We’ve outlined just some of those that businesses can watch out for.

Consumers will keep exchanging loyalty for value

The trend towards Australians being more selective in where and how they shop is expected to remain firmly in place. In the CommBank Consumer Insights Report (September 2023), almost one in two consumers said that as cost of living pressures rose, they only shopped with known and trusted brands.

Most said that would continue once living costs normalise.5 Using promotional codes, cashback offers and rewards and spending more time researching before buying were similarly set to remain persistent trends.

For ecommerce businesses, this puts a spotlight not only on the discovery and buying stages of the customer journey, but other aspects of the experience too. From budget-friendly options and making returns easy to rewards programs and payment options, every interaction can offer a reason to remain loyal.

Demand for digital payment options will continue to expand

The latest figures from the Reserve Bank of Australia show that by mid-2023, the use of digital wallets in Australia had reached 35% of card payments, up from 10% in early 2020.6 While more Australians used mobile wallets for payments, adoption was fastest among younger generations.

The use of Buy Now Pay Later services among consumers grew 13% in the year to June 2023, with 7 million Australians holding active accounts.7 Real-time account-to-account transfers on PayID enabled by the New Payments Platform (NPP) also increased.

Alongside usage growth, new digital payment options and market entrants continue to emerge. This includes the use of PayTo, the NPP-enabled alternative to direct debits, that’s set to make it easier and more secure for businesses to transact with customers.

As businesses strive to keep up with new payment options and innovations, the growth in digital payments is expected to heighten. That’s good news for the 84% of consumers who indicated that a broad range of payment options for a faster checkout is either a must-have or nice to have when purchasing8.

From payments optimisation to orchestration

It’s not just the growth in payments that will be important in the year ahead, but the move towards better integrating and managing all aspects of the payment process. If the recent pace of new payment service launches and regulatory changes are anything to go by, merchants will continue to seek simpler ways to keep pace.

There is already a movement towards payments-related IT architecture that helps businesses offer new payment methods and adapt to new technologies. Known as payments orchestration, it’s a technical layer that streamlines the setup and maintenance of multiple payments providers.

Still on the architecture front, the momentum behind a ‘composable’ commerce approach is expected to continue. That is, using a modular, microservice approach to ecommerce architecture where businesses can select vendors based on their strengths.

These trends are part of the same pursuit of ensuring agility and adaptability are built into the ecommerce infrastructure. That may prove to be even more critical in 2024 to meet ever-changing consumer preferences.

Taking personalisation into hyperdrive

Attaining a single view of a customer across increasingly fragmented online journeys and channels remains a challenge for many businesses. Turning data into meaningful insights that, in turn, drive a more personalised and valuable customer interaction will ensure that boosting analytics capabilities is a common goal among merchants in the year ahead.

Having access to the right real-time data sources from across the ecommerce ecosystem is already foundational. Using that to create contextual interactions with customers based on user behaviours and preferences is a capability many are building. In 2024, the adoption of more advanced technologies that can help predict and create personalised customer experiences may usher in the next wave.

New frontiers in security and privacy

As data-driven tools, including those used for personalising customer experiences, continue to proliferate, data and privacy controls become even more important. The CommBank Consumer Insights Report (September 2023) confirmed that these safeguards were already non-negotiable for most consumers in 2023.8

Amid rising incidences of fraud and chargebacks, payments will likely remain a cybersecurity focus in 2024. What will change is the technologies and emerging innovations used to combat the threat and keep customers safe. This includes using encryption, tokenisation, and the application of AI for fraud detection.

The maturing technologies associated with AI and machine learning are enabling businesses to detect and prevent malicious activity more quickly and efficiently. The latest evolution in this area, generative AI, can help automate proactive measures. 

Amid rapid changes in the operating environment, consumer expectations and technology landscape, it’s clear the ecommerce market will not remain static in 2024. While the trends explored here are not exhaustive, they do have a common thread. There are compelling opportunities for businesses to adapt to change and meet customers' needs, and accessible digital tools can help capture the commercial upside.

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Things you should know

1 CommBank Cost of Living Report. November 2023.
2 Australia Post eCommerce update. January 2024.
3 CommBank Consumer Insights Report. September 2023
4 Australia Post eCommerce update. January 2024.
5 CommBank Consumer Insights Report. September 2023
6 Reserve Bank of Australia. Payment Systems Board Annual Report. 2023
7 Reserve Bank of Australia. Payment Systems Board Annual Report. 2023
8 CommBank Consumer Insights Report. September 2023

This article is intended to provide general information of an educational nature only. It does not have regard to the financial situation or needs of any reader and must not be relied upon as financial product advice. You should consider seeking independent financial advice before making any decision based on this information. The information in this article and any opinions, conclusions or recommendations are reasonably held or made, based on the information available at the time of its publication but no representation or warranty, either expressed or implied, is made or provided as to the accuracy, reliability or completeness of any statement made in this article. Commonwealth Bank of Australia ABN 48 123 123 124. AFSL and Australian Credit Licence 234945.