Nearly 20 million local consumers are engaging in cross-border shopping per week, according to a study by Bronto.
The findings from the survey of 1,000 Australians indicated an outflow of potential retail dollars that could have otherwise stayed within the local economy.
According to the survey, almost all Australian consumers (93 per cent) are open to cross-border shopping today, with nearly three in four (72 per cent) already purchasing from overseas retailers.
Bronto Software GM Shannon Ingrey said Austrlaian retailers are no longer competing at a domestic level.
“With more international retailers like Amazon eyeing Australian shores, threats do not come bigger than this – competition is only going to continue heating up.
“To remain competitive, it is imperative that domestic retailers truly understand their audience and the drivers behind their shopping behaviour, to develop more targeted and personalised strategies,” he added.
Of those purchasing internationally, over a third (35 per cent) had done so in the last week, 27 per cent in the last month, 17 per cent in the last three months, and 21 per cent within the past year.
Better prices (72 per cent) and unique merchandise (68 per cent) were the top two reasons driving Australian consumers to turn to overseas retailers.
On the flipside, shipping costs was identified as the single biggest barrier to cross-border shopping, as indicated by three-fourths of Australians who have not yet made a purchase.
This was followed by a lack of trust in online payment methods (40 per cent), security concerns (38 per cent) and prolonged delivery times (37 per cent).
Australian men are more likely to have purchased from overseas retailers compared to women, with 74 per cent of male respondents and 69 per cent of females indicating so.
The findings suggest key areas of opportunities domestic retailers can potentially draw on to have a leg up on their overseas counterparts, said Ingrey.
“The first and most crucial step is to focus on why consumers stray and work towards addressing them – as the findings suggest, that’s better pricing and unique merchandise,” he explained.
“Retailers should also look to exploit the advantages of the home territory.
"To do so, ensure that all aspects of the transaction that impede cross-border shopping, such as shipping costs, delivery time and data security, are clearly addressed early on in the purchase journey.”
The top overseas markets for Australian markets are United States (79 per cent), United Kingdom (71 per cent) and Canada (46 per cent).