The so-called “lipstick effect” – where consumers cut back on big discretionary purchases but spend on smaller, affordable indulgences – has hit spending habits.
Australia Post’s latest Quarterly eCommerce Report, released today, showed that people were still spending, but targeting cheaper items.
Australians spent $21.9 billion online in the last quarter of 2025-26, a 14 percent year on year increase.
The report said people were becoming increasingly strategic about when they shopped.
Around 60 percent of people say they never buy at full price anymore and a similar number enjoy the anticipation of major sale events.
Australia Post General Manager Parcel, Post and eCommerce Services Chelsea O’Reilly said online retail remained resilient despite the changed habits.
“Australian consumers aren’t spending less, but they’re becoming more deliberate with every dollar,” she said.
“They’re comparing options, chasing value, waiting for the right offer and expecting convenience at every step.
“Retailers that make shopping simple, deliver on their promises and give customers a reason to come back will be the most successful.”
The report said one of the strongest trends emerging from the quarter was the continued rise of the lipstick effect.
As consumers increasingly focused on value and held out for key sale events, average online basket sizes fell to a low of $90.
Millennials appeared to have the most discretionary spending capacity of any generation, followed by Gen X and Gen Z.
The full report is here
