Online retailer Lust Have It has revealed how it is leveraging the rise of online consumers, after the managing director of Officeworks said there is less money to be made in online retail.
Lust Have It, launched in July 2011 by Tasmanian mumpreneur Nicci Herrera, is an online beauty box subscription service, which boasts brands such as Lancôme, Benefit and Shiseido.
In February, Lust Have It revealed subscriptions have grown by more than 1000% over the past year.
Now the company has released the results of its annual consumer trends study, which is based on a survey of more than 1000 of its members.
On average, more than 50% of Australian women spend a minimum of $70 a month on beauty products, according to the study, while one in 10 spend more than $100 a month.
The findings come after comments made by Officeworks managing director Mark Ward, who has stated online retailing is not as profitable as bricks-and-mortar retailing.
“We are selling more online than we ever were before… We are selling more units,” Ward said at a retail conference in Melbourne yesterday.
“But we are selling them for less, as basket sizes have come down because we have made life so convenient for the customer.
“It does have implications for your profitability because your supply chain is under more pressure than ever from selling more baskets, more often.”
In addition to their preference for making smaller purchases more often, the Lust Have It study shows consumers are becoming increasingly reliant on online communities for information.
More than nine out of 10 survey respondents said online sources such as beauty websites, blogs or social media channels were influential when it came to making purchase decisions.
This year’s top three channels for influencing the decision-making process were online beauty sites, beauty blogs, and family and friends, the study shows.
In 2012, the top three channels were beauty blogs, beauty magazines and online beauty sites.
“It’s not surprising that online and word-of-mouth are only growing stronger and we believe they will continue to do so,” Lust Have It chief executive Greta Stojanovic said in a statement.
“This is why we are so passionate about continuing to grow our online community.
“We enable them the freedom to review and compare their experiences with the products we provide each month. It’s also a great way for brands to gain honest feedback on their products.”
While 70% of the women surveyed said they do take price into consideration, they are prepared to pay the price for a premium product if they know it works.
According to Stojanovic, this figure has decreased.
“This is 15% down on last year, which further demonstrates the need for women to take the risk out of being disappointed by high-end purchases,” she said.
“In the current economic climate, our ‘try before you buy’ formula allows women to be more resourceful before they decide to make a big purchase.”
The study also showed a 15% reduction in purchases from overseas websites over the past 12 months, suggesting consumers are more willing to favour Australian retailers.