At the barbecue of retail business, bricks and mortar are the smouldering ashes while online retail flames leap through the grill – despite global economic turmoil’s best efforts to extinguish the fire.

Defying the gloom and doom, online retailing surges ahead undaunted – indeed, catalysed – by the economic conditions bringing down traditional retail businesses. And there’s little joy in sight for bricks and mortar, with the Productivity Commission flipping them a gargantuan ‘up-yours’.

The Productivity Commission acknowledged that offshore online sales are likely to remain ‘attractive’ to consumers in spite of the depreciating dollar, and that the lowering of the GST threshold would have little to no impact on the productivity of the industry  – a hard slap in the face for Australian retailers desperate for relief. Now, it seems, the only choice is to compete online – where the customers are today.

“Australian consumers want to shop online, there is no doubt about it – and the fact is they can, anywhere, anytime,” Grant Arnott, Online Retailer Conference and E-Commerce Expo conference chair, said.

“Too many bricks and mortar retailers are clinging to traditional models that presume shoppers want to make a time-consuming trip to a store, battle for scarce parking, beg for service, stand in a checkout queue and then lug shopping bags back out to the car.”

Paul Greenberg, executive chairman for concurs. “Consumer frustration with local retailers is not about 10 percent. It is, unfortunately a far bigger issue. Our customers continue to tell us they prefer to shop locally for a number of reasons, but of course the experience, range and variety needs to be a good one. If not, well, the global village is upon us, and they will shop where they can get a great experience.”

Though plagued with reports about the demise of the local retail industry and foreign invaders robbing market share, all of this doom and gloom is overshadowed by the state of the $36 billion Australian online retail industry, which is booming.

With Forrester Research indicating that Australian consumers spent $606 million just purchasing books online in 2010  – the question is, why are retailers so reluctant to embrace this channel?

“Too many retailers are ‘waiting’ for government intervention on the GST issue. And perhaps it might come, but in the interim, my advice to retailers is to focus on improving the customer experience. Period,” Greenberg said.

“Price is not the be all in the consumers mind. Australian retailers need to show the value in buying locally which includes faster shipping, local returns processes and in most cases product which is shipped to Australia for the Australian market,” adds Peter Krideras, Head of eCommerce, Bing Lee.

Whatever the case may be Australian retailers are in a position to take control of their businesses and with the low-cost barriers to entry, boundless opportunities for geographic expansion, personal and social connectivity to customer bases – online retailing presents a golden opportunity to do just that.

“We need to lift our game to compete with the best of the world in online retail. Over the next three years the roll-out of faster internet speeds, and new technologies (such as mobile and tablet applications) are likely to enable a new type of consumer – one who expects to get what they want, where they want it,” warns Paul Robinson, Marketing and Communications Manager, for 2010 ORIA Online Retailer of the Year, ABC Shop.

“This will see online retailers (who are leading innovation and providing the tools for the new consumer) moving to take the place of traditional retailers who are unable to keep up with the rate of change. This has already happened.”

Arnott, a stalwart of the Australian online retail industry and responsible for compiling the agenda for Australia’s largest e-commerce learning event, the Online Retailer Conference and E-Commerce Expo, concludes, “Retailers need to embrace and promote the 'omnichannel' shopping experience – giving customers back the choice to buy online, via mobile, in-store, or through social media marketplaces, otherwise they will lose interest.”