By Aimee Chanthadavong
While it appears that the online retail market is sending many bricks and mortar retailers in a downward spiral, one industry expert has told RetailBiz the online market should be an opportunity that should be embraced.
“If we look overseas where online retailing sales as a percentage of revenue is 9 per cent in the UK and 7.5 per cent in the US compared to Australia, which is only 5.5 per cent; it shows we’re still an immature market,” Stuart Harker, PwC global retail & consumer advisory leader, said.
“I think what’s going to happen is that we’re seeing the evolution of an optimised channel that consumers are demanding for whether that is Facebook or a mobile device, it’s a channel that consumers are using to get what they want from retailers.
“I think there are opportunities for all and this can’t be the end of retailing because we haven’t seen that happen in the other markets.”
This comes following research from PriceWaterhouseCoopers (PwC) predicting the online shopping market in Australia in 2011 will reach $13.6 billion, a growth of 13 per cent from the $12 billion expenditure in 2010. This equates to 5.5 per cent of total retail sales and per capita expenditure of $600, and reflects an 11.9 per cent increase from $536 in 2010.
It is estimated that $6 billion will be spent by Australians on overseas websites this year. This equates to 44 per cent of the total online purchases for 2011, an increase of 25 per cent from 2010.
The survey found the main reasons behind why consumers look to shop online are the lower prices, the convenience and access to a broader range of products.
According to Harker, the reasons behind Australia’s slow adoption to the online world is because retailers have been faced with difficult issues including the GFC, faster supply chains offered by global competitors, the strong Australian dollar and the fact that consumers are able to access their tablet or mobile devices and be able to show anywhere, anytime.
“But it’s a consumer push not a technology pull,” he said.
“They’re [consumers are] looking for value and they have apps that can show them the price and the availabilities of the products given them ultimate price transparency.”
Nevertheless, Harker said while the physical store will always be apart of the retail landscape, retailers need to also offer an online experience.
“Retailers are responding quite well where we are seeing some of the big retailers running hard such as Wesfarmers’ brands, Woolworths, Sportsgirl and Myer. We’re also seeing smaller small retailers changing their website so customers can conduct transactions and then we have pure plays like Shoes Of Prey do extremely well.”