When it comes to online sales of baby clothes, nappies, food, toys, furniture and other products, ‘b’ should stand for billion. That’s how much revenue the industry is expected to generate in 2025 — $1 billion — up from $746.5 million in 2020, according to a recent IBISWorld report.
Two of the key factors that will drive growth in the years ahead are the continued uptake of online shopping by consumers and better ranges and lower prices becoming available as retailers improve their digital offerings and delivery options amidst increased competition in the sector.
While the online baby product industry is still dominated by small, individual businesses, major retailers and specialty players like Woolworths, Coles, Big W, Target, Kmart and Baby Bunting have increased their market share in recent years, drawn by the relatively stable demand for bottles and swaddles.
Unlike some retail categories that rise and fall based on unpredictable trends, new parents reliably need to buy nappies, prams, car seats and clothes for their little ones. But with Australia’s birth rate set to keep falling for the foreseeable future, online retailers need to start thinking differently to continue to grow.
Here are some of the key opportunities you need to be aware of.
Fast shipping is vital
Fast shipping is vital for online retailers in any category, but when it comes to certain items in the baby product industry, such as infant food and formula and nappies, speed of delivery is even more important.
Offering same day or next day delivery will help you compete with bricks-and-mortar stores. And if you use a multi-carrier shipping platform like Shippit, you’ll benefit from discounted prices with a range of couriers that you can pass onto your customers at the checkout.
If you’re considering improving your shipping offer, you may also want to think about adding international shipping. With Australia’s birth rate set to keep falling, expanding into overseas markets could be a smart growth strategy.
By integrating DHL international shipping into your website, you could reach customers in 220 countries. And with great rates and automated label generation, Shippit makes it easy to send a local or international DHL shipment.
Take a look at our international shipping checklist to see if you’re ready to enter a new market.
Great customer service is a must
While consumers are comfortable buying a wide range of baby products online, there are still some items many people prefer to buy in-store, such as car seats and prams. Some of the reasons are cost — prices for these items can be in the thousands — and safety concerns, which require a high level of support and customer service throughout the purchase process.
Online retailers need to offer an unbeatable customer experience with a strong focus on after-sales support to compete. Even if you’re not selling prams and car seats, you still need to give shoppers a reason to buy baby clothes and shoes, nappies, food, toys, furniture and accessories online, rather than in-store.
The Memo does this by providing a highly curated online store that only stocks the items new parents “really need” instead of selling them with specialised gadgets that will only collect dust.
Take a look at 7 easy tips to nail your customer experience (CX) so you can be the hero your consumers deserve.
Niche and premium is where it’s headed
With major retailers like Woolworths, Coles, Big W, Target, Kmart and Baby Bunting putting downward pressure on prices and profit margins, many smaller online players are finding greater success with niche and premium offers.
Clothing brands with a focus on natural fibres and organic skincare brands are tapping into the broader shift towards sustainability in retail, while luxury brands such as Gucci are creating a new high end in the baby clothing industry.
These trends are expected to grow in the years ahead as the average age of new parents rises, giving them more disposable income to spend on premium products.
Want to know what other trends could impact your business in 2021? Check out our blog on four big retail trends here.