Surf, Shop, Save
28.02.2024 - 01:12
Our new report ‘Surf, Shop, Save’, commissioned by Amazon, explores how online channels have helped to lower the cost of living in Australia. Our report finds that online channels have helped reduce the cost of living pressures for Australians through cost-efficiency and competition effects. Since 2019, prices for online channels have been deflationary, while CPI has grown. When compared to each other, CPI has grown 10.5 percentage points more than prices for online channels for comparable categories of goods. During this time, online channels have also placed downward pressure on prices quoted by offline channels, helping reduce inflation by 0.7 percentage points during its peak in 2022. These effects saved Australian households nearly $3,500 on average since 2019.
Online channels help reduce cost of living pressures for Australians through cost-efficiency and competition effects
The retail sector consists of online and offline channels, with retailers using a mix of both to reach consumers, often within a single purchase journey.
Within this omnichannel retail sector, the cost-efficiency effect of online channels sees the cost savings from reduced handling and improved distribution being passed-on to consumers in the form of competitive prices. The competition effect of online channels sees reduced prices across the broader retail sector due to increased competition and increased consumer choice. This allows consumers to shop around for the best price.
Since 2019, prices for online channels have been deflationary, while CPI has grown
To estimate the cost-efficiency effect, we analysed a sample of over 60,000 distinct products from online channels, creating a time series of prices from 2019 to 2023. Using this data, we constructed an ‘Online Channels Index’ (OCI) and compared each category of the OCI (e.g., clothing and footwear) to the corresponding sub-group of the ABS’ Consumer Price Index (CPI).
Comparing the OCI to CPI, we find that the OCI has grown 10.5 percentage points less than CPI since 2019 for comparable categories of goods. This indicates that products that are available via online channels experience lower price growth than similar goods that are strictly sold through offline channels.
Annual inflation in Australia was 0.7 percentage points lower than it would otherwise have been thanks to the competition effect of online channels
Online retail channels have also placed downward pressure on prices quoted by offline channels. Without online channels, inflation in Australia would have been 0.7 percentage points higher during its peak in 2022.
Households have saved nearly $3,500 on average since 2019 thanks to online channels
Since 2019, Australian households have saved almost $3,500 on average due to online channels. Just over a quarter of this (26 per cent) was due to the cost-efficiency effect of online channels, and the remaining 74 per cent was due to the competition effect. The largest cost saving was from expenditure on recreation and culture.
Read the full report here.
Read our latest posts
Reimagining the value of the arts – An introduction to the Economist in Residence Platform
Reimagining the value of the arts introduces the Economist in Residence platform, a collaboration between RISING and Mandala. Australians are attending the arts in record numbers, yet public investment per person has fallen and artists and venues are under pressure. The report argues that current valuation methods miss the health, social and strategic benefits of the arts, which weakens the case for funding. It proposes a different question: not what the arts are worth, but how they help Australia meet shared national goals. Over the next year, the platform will build the evidence base across three pillars: cultural good, economic sector and strategic asset.
12 Nov, 2026
Harnessing AI in the court system
Mandala’s latest research, commissioned by Microsoft, examines how AI can help Australian courts improve access to justice by reducing persistent case backlogs. We find that three promising AI applications (smart scheduling, document review and legal research support) could deliver around 95,500 additional case finalisations a year. These applications help courts manage existing workloads more efficiently, while reinforcing the integrity of court processes.
29 Oct, 2026
Rethinking the APR
Mandala's latest research, commissioned by Block, examines whether US credit disclosure requirements remain fit for purpose in a rapidly evolving lending market. Drawing on economic analysis, a survey of nearly 1,600 US consumers and small business decision-makers, and proprietary credit data, the report finds that Annual Percentage Rate (APR) disclosures can misrepresent the perceived cost of short-term borrowing and influence consumer choices. The report makes the case for modernising credit disclosure requirements, with a more flexible approach that better reflects different credit products while preserving consumer protection and access to credit.
15 Oct, 2026
The augmented attacker: the growing AI-driven cyber threat to Australian businesses
Mandala's latest research, commissioned by CyberCX (part of Accenture), shows that the AI-driven cyber threat to Australian businesses is growing. The report finds that AI could increase the frequency and severity of cyber incidents targeting Australian businesses. As AI-driven threats grow, Australian businesses could face losses reaching up to $37 billion a year. However, investing in foundational cyber defences such as patching known vulnerabilities could reduce annual losses from $37 billion to $13 billion, a $24 billion saving. Three-quarters of the savings are from preventative actions. The report highlights the actions required from businesses and government to improve cyber defence.
13 Oct, 2026