According to the most recent NAB Online Retail Sales Index, online shopping accounted for less than 5% of retail spending last year and only 27% of that went to retailers overseas. If these figures are accurate – and I’m sure they are – it pretty much negates the argument made by the major retailers that online shopping and in particular, overseas retailers, have been cutting into their profits.
From the NAB Online Retail Index, we can assume that despite the convenience of online shopping, consumers in Australia still prefer the touchie-feelie experience only our traditional bricks and mortar stores can provide. But is this the end of the story, or is there another reason why consumers are still choosing to frequent their local shopping centres?
There is no denying the fact that overseas retailers have launched a major assault on Australia in recent years. For example, US department store Guess – and on the other side of the Atlantic, British fashion retailers T.M. Lewin and Next – have all established online stores targeted to Australian consumers. And why not, when Australian retailers don’t appear all that interested in growing the online retail arm of their business.
Whilst major retailers overseas have invested heavily in growing their online retail arm, Australian retailers are only now starting to board the online shopping express – albeit, quite reluctantly. In fact, it seems to me that at this stage, their online retailing efforts are but a token gesture to online shoppers in Australia.
You only have to take a look at the website of any major department store in Australia to know they’re not all that interested in providing consumers with an exciting and innovative online shopping experience. Compared with what you can buy in-store, the major retailers in Australia only offer a fraction of their product range online. In this regard, the smaller online retailers in this country leave the major players for dead.
It’s also clear that the major retailers don’t want their online stores competing with their traditional bricks and mortar stores. CEO of Harvey Norman, Gerry Harvey, has said as much in the media. However, by resisting the expansion into online shopping, our major retailers have created a gap in the market that retailers overseas are only too happy to fill and although they’re no threat to the local retailers at this stage, if our major retailers don’t lift their game, online retail spending figures like those released today, will be telling a very different story in a few years time.
With online shopping predicted to grow a further 10% this year alone, Australian retailers can’t depend on having the home court advantage for much longer, not when most overseas retailers are now offering free shipping and express international delivery to overcome the vast distances between us, and the United State and Europe.
Instead of simply telling us what they’re prepared to provide, our major retailers should be asking consumers how they can best serve customers in the 21st century.
Photo: © Oleg Fedorkin – Fotolia.com