IAB Australia reveals online shopping surge in fifth consumer insights report

IAB Australia released its fifth wave Consumer Insights Report on July 29, 2025, revealing significant shifts in online shopping patterns across Australia and New Zealand. The comprehensive study, conducted in collaboration with Pure Profile, surveyed 1,000 Australian online shoppers aged 18 to 70, providing critical data for the marketing community as retail maintains its position as the number one online display advertising category.

According to the report, Australians spent over $63 billion on online retail in the 12 months to May 2025, representing approximately 13% year-on-year growth based on NAB's online retail sales index. This substantial increase demonstrates how pandemic-driven shopping behaviors have become permanently embedded in consumer routines, with six in 10 online shoppers now purchasing every two to three weeks and eight in 10 shopping monthly.

The research tracked over 1,600 retail and commerce organizations through IAB's endorsed Ipsos Iris Measurement panel, highlighting the vast expansion of online purchasing options available to Australian consumers. Amazon continues to dominate as the most popular online retailer, followed by Kohl's, Big W, eBay, and Kmart completing the top five rankings.

Generational differences drive distinct shopping patterns

Shopping behaviors demonstrate significant variations across age demographics, with younger consumers showing markedly different preferences than older generations. According to the survey data, online shoppers aged 18 to 39 are significantly more likely than older counterparts to purchase from supermarkets, fast food delivery services, and social media platforms.

The report revealed that after Amazon, Uber Eats ranks as the second most popular online retailer for consumers aged 18 to 29. Meanwhile, New Zealand presents a different competitive landscape, where Temu maintains the highest reach among online shoppers, with Amazon showing far less dominance due to the absence of dedicated local operations.

Clothing and shoes remained the most popular purchase category over the five-year study period, though this varies considerably by demographics. Female online shoppers drive fashion purchases, with makeup and beauty ranking as their second most popular category. Conversely, online grocery shopping represents the number one purchase for male consumers, followed by clothing.

The frequency of online grocery purchasing has gradually increased throughout the study period, reaching particularly high levels among time-pressed families. The research found that 37% of families with children under 12 purchase groceries online weekly, indicating growing acceptance of digital grocery shopping as a regular household routine.

Rising consumer expectations create new service standards

Consumer expectations for online shopping services have reached unprecedented levels, with many previously premium offerings now considered standard requirements. Free shipping thresholds and easy returns have become essential features, while rising expectations focus on immediacy and responsiveness through real-time inventory availability, delivery tracking, and live chat support.

Younger generations demonstrate significantly higher expectations around delivery aspects, including faster delivery times, scheduled delivery options, click-and-collect services, and subscription models. These differential expectations across age groups require retailers to develop nuanced approaches that cater to varying demographic needs in an increasingly competitive marketplace.

The research indicates some relief from cost-of-living pressures, though cautionary discretionary spending patterns persist. While 28% of online shoppers strongly agree they have less to spend on non-essential items, this represents an improvement from previous year measurements.

Cost-of-living pressures have modified consumer behaviors across multiple dimensions. According to the findings, 58% of online shoppers report delaying purchases of big-ticket items more frequently. However, the most extreme cautionary behaviors have reduced compared to previous year measurements, suggesting gradual economic confidence recovery.

Loyalty programs gain prominence amid financial pressures

Loyalty programs have emerged as crucial tools for demonstrating value to consumers, with 54% of participants increasing their usage due to cost-of-living pressures. The research also documented that nearly four in 10 online shoppers have increased their purchasing of pre-owned items, primarily motivated by cost savings rather than sustainability concerns.

Despite economic pressures, consumer willingness to pay premium prices for quality persists in specific circumstances. Six in 10 shoppers report willingness to pay extra for higher quality or durability, while nearly half would pay more for trusted brands. Trust continues serving as a critical decision-making factor, particularly during uncertain economic conditions.

Multi-channel discovery patterns reshape marketing strategies

Product discovery occurs through an expanding array of channels, with consumers utilizing approximately five different touchpoints on average when discovering brands they purchase online. Search engines maintain importance, particularly among consumers over 50, though new and emerging search methodologies continue developing across various platforms.

Social media plays a significantly greater role among younger shoppers, while online stores influence consumers under 40 more heavily than physical stores, which maintain greater influence among over-40 demographics. These findings underscore the necessity for marketers to develop comprehensive multi-channel approaches that effectively reach different target demographics.

The research revealed that most consumers under 40 have discovered products or brands through influencer or content creator promotions across social media, video platforms, and podcasts. However, authenticity remains paramount, with one-third of online shoppers indicating they would be less likely to act on recommendations if they know creators are paid to promote products.

First-party data collection becomes critical competitive advantage

Retailer-owned content significantly influences online shoppers, with websites and emails representing the most consumed content from retailers. Younger consumers engage more heavily with retailer social posts, online video content, mobile applications, and in-store events, creating rich behavioral data opportunities for retail marketers.

The study found that nearly all online shoppers consider it important for retail businesses to provide clear information about personal data usage, with 73% expressing concern about how retailers use their information. With privacy legislation undergoing reform, retailers and marketers must prepare for regulatory changes while building trust through transparency.

Despite privacy concerns, nearly all online shoppers express willingness to share some information with retailers in exchange for benefits. Email addresses represent the data point consumers are most willing to share, while adequate compensation for data sharing includes discounts, exclusive offers, and early access to sales.

Industry implications for marketing community

The report's findings carry significant implications for the marketing community, particularly as retail maintains its position as the dominant online advertising category. The evolving consumer behaviors documented in this research align with broader trends in retail media adoption, where 62% of Australian advertisers and agencies have already implemented retail media campaigns.

The emphasis on multi-channel discovery patterns reflects broader shifts in consumer search behavior, where nearly half of young adults now use social media platforms for product discovery instead of traditional search engines. This transformation requires marketers to reconsider fundamental assumptions about consumer journey mapping and channel attribution.

The growing importance of first-party data collection becomes increasingly critical as the industry prepares for privacy legislation changes, with standardized measurement frameworks becoming essential for retail media effectiveness.

Technology partnerships drive commerce innovation

Industry experts participating in the report's analysis highlighted how technology partnerships are reshaping commerce experiences. Chloe Sanderson from Afterpay emphasized the importance of behavioral data over traditional demographic targeting, noting that 72% of Afterpay consumers are Gen Z or millennials who shop based on moment, mission, and mindset rather than conventional age-based segments.

Ivan Chen from Pure Profile highlighted emerging trends in male beauty and skincare purchasing, particularly among Gen Z consumers who demonstrate impulse purchasing behaviors at rates significantly higher than previous generations. This trend, driven by social media normalization and platforms like Instagram and TikTok, represents new market opportunities for brands willing to adapt messaging and creator campaign strategies.

The research underscores growing sophistication in loyalty program expectations, where consumers demand clarity and tangible value rather than traditional points-based systems. Pure Profile's research indicates increasing demand for flexible, personalized reward programs, with more than two-thirds of consumers preferring brands that allow loyalty scheme customization.

Timeline

• March 2022: IAB Australia publishes cookie deprecation guidance paper
• August 30, 2024: IAB Australia unveils retail media measurement guidelines
• September 9, 2024: Digital advertising spend in Australia hits $15.6 billion, growing 9.7%
• December 1, 2024: Australian online ad spending surges 12.1% in Q3 2024
• January 18, 2025: IAB Australia sets dates for audio advertising summits
• June 25, 2025: Social media becomes new search engine for younger shoppers
• July 29, 2025: IAB Australia releases Consumer Insights Report Wave 5 at Commerce & Retail Media Summit

Summary

Who: IAB Australia conducted the research in collaboration with Pure Profile, surveying 1,000 Australian online shoppers aged 18 to 70, with additional insights from the New Zealand market.

What: The fifth wave Consumer Insights Report reveals that Australians spent over $63 billion on online retail in the 12 months to May 2025, with embedded post-pandemic shopping behaviors showing 13% year-on-year growth and significant generational differences in purchasing patterns.

When: The report was released on July 29, 2025, at the Commerce & Retail Media Summit, analyzing shopping behaviors and trends from the previous 12-month period ending in May 2025.

Where: The research focused on Australian online shopping behaviors with additional New Zealand market insights, tracking over 1,600 retail and commerce organizations through the IAB's endorsed Ipsos Iris Measurement panel.

Why: The report highlights opportunities in retail as the number one online display advertising category, providing crucial data for marketers to understand evolving consumer behaviors, expectations, and multi-channel discovery patterns in an increasingly competitive digital commerce landscape.

Key Terms Explained

Online Shopping: The dominant consumer behavior documented throughout the report, online shopping represents the digital purchasing of goods and services through websites and mobile applications. The research reveals that online shopping has evolved from a convenience option to an embedded routine, with six in 10 Australian consumers now purchasing online every two to three weeks. This behavioral shift has created a $63 billion annual market that continues growing at 13% year-on-year, fundamentally reshaping how retailers approach customer acquisition and retention strategies.

Retail Media: An advertising format where brands promote products directly on retailer websites and applications, retail media has emerged as the fastest-growing segment within digital advertising. The concept leverages first-party shopping data to enable precise targeting of consumers who are actively in purchasing mindsets. As documented in related industry research, 62% of Australian advertisers have already implemented retail media campaigns, making it a critical component of modern digital marketing strategies that bridges the gap between product discovery and purchase completion.

Consumer Behavior: The study of how individuals make purchasing decisions and interact with brands across digital touchpoints, consumer behavior analysis reveals significant generational and demographic variations in shopping patterns. The report identifies distinct behavioral differences between age groups, with younger consumers demonstrating higher engagement with social media discovery channels and faster adoption of new shopping technologies. Understanding these behavioral patterns enables marketers to develop more targeted approaches that resonate with specific demographic segments and optimize conversion rates.

IAB Australia: The Interactive Advertising Bureau Australia serves as the peak trade association for online advertising in the country, representing publishers, advertisers, agencies, and technology providers. As part of a global network spanning 43 countries, IAB Australia develops industry standards, conducts market research, and provides educational resources that guide digital advertising best practices. The organization's research initiatives, including this Consumer Insights Report, provide authoritative data that shapes industry decision-making and policy development across the Australian digital marketing ecosystem.

Social Media: Digital platforms that facilitate user-generated content sharing and community interaction, social media has evolved beyond communication to become a primary product discovery channel. The research demonstrates that younger consumers increasingly use platforms like Instagram, TikTok, and Reddit for product research rather than traditional search engines. This transformation has created new opportunities for brands to engage consumers through influencer partnerships, creator content, and native advertising formats that integrate seamlessly with social platform experiences.

Data: Information collected about consumer interactions, preferences, and purchasing behaviors that enables personalized marketing and improved customer experiences. The report emphasizes the growing importance of first-party data as privacy regulations tighten and third-party cookies become obsolete. Retailers who effectively collect and utilize customer data can create more relevant advertising experiences, improve loyalty program effectiveness, and develop deeper understanding of consumer needs that drive competitive advantages in increasingly crowded marketplaces.

Loyalty Programs: Structured reward systems designed to encourage repeat purchases and build long-term customer relationships through points, discounts, and exclusive benefits. The research reveals that 54% of consumers have increased their loyalty program usage due to cost-of-living pressures, while two-thirds prefer brands that allow loyalty scheme personalization. Modern loyalty programs extend beyond simple point accumulation to encompass experiential rewards, early access privileges, and customized offers that reflect individual shopping preferences and behaviors.

Digital Advertising: The practice of promoting products and services through internet-based channels including search engines, social media platforms, websites, and mobile applications. Australia's digital advertising market reached $15.6 billion in 2024, demonstrating continued growth despite economic uncertainties. The sector encompasses multiple formats including display ads, video content, search marketing, and emerging channels like connected television, each requiring specialized strategies and measurement approaches to maximize return on investment.

Generational Differences: Distinct patterns of behavior, preferences, and technology adoption that vary significantly between age cohorts, particularly in digital shopping contexts. The report identifies substantial variations between consumers under 40 and older demographics, with younger groups showing higher engagement with social commerce, faster delivery expectations, and greater comfort with mobile-first shopping experiences. These differences require marketers to develop segmented strategies that acknowledge varying communication preferences, channel usage patterns, and value propositions across age groups.

Trust: The fundamental foundation of consumer-brand relationships that influences purchasing decisions, data sharing willingness, and long-term loyalty development. The research reveals that nearly half of consumers would pay premium prices for trusted brands, while one-third would avoid influencer recommendations if they know creators are compensated for promotions. Building trust requires transparency in data usage, authentic communication, consistent service delivery, and genuine value creation that prioritizes consumer interests over short-term revenue optimization.