National Australia Bank’s (NAB) online retail index shows online sales in Australia, which is worth $11.1 billion for the year to April, growth started to slowdown over the past year but it still continues to outpace traditional retail.

The Index found that online sales year-on-year growth rate declined to just 15 per cent for the month of April. Since late 2011, year-on-year growth rates for domestic and international retail spend have tracked fairly closely. But growth in domestic sales pulled back in April – down to 16 per cent year-on-year.

In contrast, growth rates for international online retail spending remained relatively firm, despite a a sharp fall in March. International sales increased by 13 per cent year-on-year in April.

But the Index found that domestic retailers – those that are Australian for tax purposes – continue to dominate online retail sales, with a 73 per cent share of the market.

 “It will be interesting to see how the strength of the AUD will affect overseas sales going forward, as it was reaching parity with the USD in late 2010 that originally triggered increased growth in online sales overseas.” Tony Davis, Quantium director, said.

Australia’s online spending continues to be dominated by those in their 30s and 40s, with Gen Y spending remaining below average. Under 30s are spending more on online Department Stores and Recreation, whereas over 60s spend more on Food and Beverages. The under 30s have a higher propensity to purchase from international retailers –one third of spending from 30s is made overseas compared to a quarter for all other age groups.

“Australian retailers are facing myriad challenges and new opportunities to reinvigorate their business. Central to many of the conversations I’m having with our retail clients is the need to adapt their businesses as consumer preferences and spending habits change by considering a multi-channel approach,” Thorn concluded

“Consequently, it is important for the sector to understand what is happening across online and the traditional bricks and mortar footprint. Many of our clients are keen to leverage the insights gleaned from our NAB Online Retail Sales Index.

“The 15.5 per cent year-on-year growth in online retail versus a 4.1 per cent growth in traditional retail highlights that the change in consumer preference is here to stay and retailers need to adapt. Similarly, the significant increase in online spending in Western Australia emphasises opportunities for retailers to tap into new growth markets.”