Fast delivery and free returns will be the main drawcards online retailers will be using to lure customers to shop with them this Christmas, according to IBISWorld.

Figures from the business information analysts reveal overall Christmas spending will rise by 3.9 per cent this year, with the average Aussie spending around $1,600 at the height of the silly season to bring the total to $28.5 billion with expectations most of that growth will come from online sales.

IBISWorld forecasting a surge of 34.4 per cent compared to growth just below 10 per cent between December 2010 and 2011. This year, the closest sector on the tail of online sales is liquor retailing with 10 per cent growth from 2011, followed by electronics with a jump of 7.7 per cent.

IBISWorld Australia general Manager Karen Dobie said the growth in online spending will more than triple this festive season as online shopping finally delivers its promise to compete with conventional retailers.

“Online sites such as, and are luring customers with promises of super-fast delivery, free shipping and free returns, making it incredibly tough for bricks-and-mortar stores to compete. And since the online medium has the added advantage of targeted marketing via e-mail, social media sites and SMS to promote daily deals and Christmas offers – it’s little wonder fashion and footwear retailers are suffering,” she said.