In a month where Topshop finally announced their first foray into the Australian high street market (and reported a 100% uplift on their online sales to Australia on the day the news broke) it’s time Australian retailers admitted how vulnerable they are to overseas competitors.

Particularly in online where the usual barriers to entry (geography, large investment, mass recruiting) don’t really apply.

To illustrate, a frightening statistic: 40 cents of every dollar spent online in 2009 by Australian shoppers went to an overseas retailer. That’s 40% of a market worth an estimated $23 billion, rising to 32 billion in 2012, according to Forrester Research. This incredible figure, quoted back in September, should be a definite wake-up call to Australian retailers. The question is, is anyone listening? And if they are, what are retailers doing about it? How do you kick overseas retailers off your local turf?

1. Range

Taking off my digital consultant hat for a second and speaking as a consumer, the biggest reason I turn to Amazon or other non-Australian suppliers is unquestionably range. Not just the variety of categories, but breadth and depth of SKUs within those categories. Understandably, Australia’s unique geographical positioning and size presents some interesting challenges for distribution, but customers aren’t interested in excuses. Until local retailers are able to compete on range with the major UK and US online stores, that 40% figure will not shift. Heck, it may even grow!

2. Secure Payment Options

This might sound like a bit of a no-brainer but it still amazes me how so many Australian ecommerce websites offer little in the way of payment options; indeed, many feel about as safe as a Tim Tam biscuit at a Weight Watchers’ meeting! Often sites do not carry SSL certificates on relevant pages, nor do they have any assurances regarding card details and data storage, and very little information about how data is handled and who by. Additionally, a range of payment options such as Paypal, gift cards, credit and debit cards gives customers choice and increases conversion by allowing customers to pay the way they want. We recently integrated Paypal as a payment option on one of our client’s websites. In just over a month, almost 25% of their sales now come from Paypal transactions, sales which may have otherwise gone elsewhere had they not offered this option.

3. User Experience

I’m not going to deep-dive in to this suffice to say user experience (UX) is a subject that could cover 100,000 blog posts. However, a general principle applies that I firmly believe will always lead to better and better UX on your website: release early, analyse behaviour, iterate and change, then re-analyse. The chances of you nailing the ‘perfect’ UX (if such a thing even exists) first time around through chance and judgement is slim, so having the tools and resources in place to analyse user behaviour and constantly fine-tune information architecture and user interface is paramount. You can be sure your overseas competitors are doing it, so make sure you are keeping pace.

4. Customer Service

Customers online are a pretty cut-throat bunch and won’t tolerate being messed about. The reason why behemoths such as Amazon and Zappos have so successfully cornered the online marketplace is simply that when you order from them, it’s a clear, coherent and reliable experience. Messaging is up front and precise, pricing and delivery is communicated simply and effectively, and when things go wrong (as they invariably will at times) there is a clear method of contact. Simple stuff but incredible how many Australian retailers aren’t getting this right. Be clear, be up-front, and have a human on hand to clear things up when things go wrong.

5. Leverage Brand Loyalty

We all know Aussie customers love to buy Aussie, so make the most of it! Fly the flag for local products, champion local artists, authors, producers and manufacturers. Distinguish yourself from overseas retailers by speaking your customer’s language and showing your knowledge of their culture. Tapping in to local events, news stories and celebrations will give you an edge your overseas competitors just won’t have. All studies show one of the biggest ‘converters’ online is trust, so remind your customer base that you’re a local, trusted brand who understands them and knows what they want.

One final note, last week Amazon announced it would be opening its first UK bricks-and-mortar store. Business owners take note; lose the online battle, and you may well also lose the entire retail war.