One of the key factors that are driving Australian consumers to shop online is that it saves them money, a study from The Australia Institute reveals.

In fact, the rise and rise of online retail survey found that 85 per cent of respondents who shop online do so because they save money.

But it was also revealed that Australian retailers on average are marking-up the prices of items such as clothes and shoes by 142 per cent and around 40 per cent for items like DVDs and music to remain competitive.

Richard Denniss, Australia Institute’s executive director, said Australian consumers do not feel they are getting a fair deal from traditional retailers when they see so many products up to 50 per cent cheaper online.

“Our survey asked people by how much they think it is fair for retailers to mark up their prices to make a profit. They considered a mark-up of around 35 per cent to be fair,” he said.

“This shows just how much Australian consumers underestimate the cost of the traditional retail process which takes into account shipping, warehousing, displaying, advertising, sales staff and rent.”

“Given the huge disparity between people’s perceptions of what is a fair mark-up and what they are being charged in bricks and mortar shops it’s not surprising that they are choosing clicks over bricks.

Other reasons why customers are shopping online is because they want to compare products and prices while one in two respondents saying they do so to save time. Yet, one in two respondents also felt that online retail is hurting Australian jobs.

“The fact is, traditional retail is a very expensive way of delivering products to customers and just as digital cameras have decimated photo development labs, so too will online retail transform the way Australians shop,” Denniss said.