SYDNEY: Free shipping is the most effective way to meet customer satisfaction, according to 400 Australian retailers questioned in a recent report that also recommended they improve their mobile and digital options.

According to a joint study from the Australian Retailers Association (ARA) and ChannelAdvisor, the ecommerce solutions provider, almost two-thirds (65%) of survey respondents had offered free shipping in the past 12 months.

They viewed it as their most effective online sales tool, Marketing Magazine reported, but the report suggested their mobile advertising needed to catch up.

Even though nearly half reported that at least 20% of the traffic to their retail websites came from mobile, less than 5% of their advertising budget was spent on targeting this source.

Nearly half of those surveyed viewed social media channels as a "gateway" for attracting a new generation of customers, but only just over a third (36%) saw social media as a way to drive conversations.

However, over three-quarters (77%) viewed social media as a means of increasing brand awareness with 93% citing Facebook as the most effective social channel.

The report also examined retailers' approach to international and third-party opportunities and it found 33% sold on international websites while half sold on third-party marketplaces, such as eBay (41%).

With Australians spending an estimated $15.6bn each year online, ARA executive director Russell Zimmermann appreciated that retailers faced many challenges, but urged them to make better use of planning and measurement.

"Retailers often answered 'I don't know' when asked questions about where their sales or webstore traffic originated, or how much they were spending on advertising," he said.

"Ecommerce is, and will continue to be, a core part of retail, and retailers must continually learn how to operate efficiently and effectively in this new world," he added.

Data sourced from Marketing Magazine; additional content by Warc staff