Online challenge to Australian retail

21 August 2013
SYDNEY: Online retail spending in Australia is forecast to reach $18bn this year and to grow 39% to $25bn by 2015, new research has said, but with up to 50% of expenditure going to overseas sites, local retailers are being urged to adopt an omnichannel strategy.

NetSuite, a provider of omnichannel commerce suites, sponsored a study by the Australian Retailers Association and Frost & Sullivan, the market research company (ARA). Some 219 retail managers were questioned during July 2013 in order to ascertain their views.

Currently, more than half of Australia's 77,000 retail businesses have a website, but only one third accept orders online and the study said that, at 7% of total retail sales, online sales remained behind that of comparable markets such as the US or UK where online now took 10% of all retail sales.

"As Australian consumers become more confident with online shopping, and as a greater number of retailers actively promote their online offerings, the value of online retail sales is growing at double-digit rates, suggesting that Australia still has room to grow," said Dougan.

But he warned that many brick and mortar retailers were missing out and advised them to adopt a multi-channel approach. This, he said, "can offer them many opportunities, such as lower operating costs, the ability to reach new customer segments, the potential to broaden their product range and the ability to operate with fewer geographic limitations".

With 30% of online shoppers in Australia using mobile devices and two thirds using social media, these are channels that retailers need to be present in to interact with consumers, the survey said.

Mark Troselj, NetSuite's managing director for APAC and Japan, suggested that "a successful omnichannel strategy will be the key to the survival of many Australian businesses in coming years" but cautioned that such strategies could take time to develop.

One of the major problems faced is the lack of integration between retailers' web front-end and back-end fulfilment systems – the study found just 24% of Australian retailers with a web presence had software that integrated web orders with the inventory management system.

Data sourced from PR Newswire; additional content by Warc staff
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