For Australian retailers now is the time to think about investment in an online store and an invigorated channel strategy.

2007 research predicts that in Australia, online sales will increase from 4.9% to 8.2% of total retail sales by 2010. A recent Nielsen Online survey indicated that 43% of Australias online spending in 2009 went to international etailers. This compares with just 14% in 2005.

Dozens of overseas fashion retailers have expanded their ecommerce presence in Australia, such as Topshop, Urban Outfitters and Anthropologie with some international etailers claiming that Australia is its third or fourth largest market. The choice for purchasing is now both international and virtual and no longer physical and domestic.

Etailing is complex and requires a sophisticated approach since it’s not just an online web interface and a shopping cart; it’s more than that. Etailing is about understanding and capturing consumer behavior data, analysis of that data, continuous communication points, customer service, follow up, integration points into CRM’s, financial and supply chain management systems, for instance.

So why are we not looking at international retailers as our role models? From my experience, the lack of wisdom in technology and the technical possibilities is where the gap lies. Let me give you an example:

Recently, we pitched to a retailer. The panel was made up of a marketing team and a researcher. The brief indicated no technical requirements except for a ‘sexy’ look and feel and some type of interactivity, yet they wanted an online store.

The questions raised by the panel had very little to do with their understanding of etailing and the complex nature of these systems. The focus for the researcher (on the panel) was, “What content management system (CMS) do you recommend and use?” Why on earth would you be focused on a CMS when the pitch was about ecommerce?

Unfortunately the panel couldn’t grasp the idea of what they actually required which was a product management system and numerous integration points. The CMS was the least of their requirements. Not one person on the panel had an understanding of their internal business systems and a flow of how they wanted to communicate to their customers. What was even scarier was that there was no IT person sitting in this meeting and not one person could answer any questions associated with ecommerce.

Small, medium or large retailers need to consider serious management systems behind their ‘website’ and invest in their online stores as they would in a bricks and mortar store. Perhaps taking the project more seriously and engaging professional experts who really understand how to build systems that both match their internal business model and have the ability to engage their customers virtually, is something that needs to be considered.

The international retailers are investing hugely in their online stores and have implemented sophisticated systems that really deliver a ROI but more importantly they are stealing market share from Australian retailers and will continue to do so. What are you doing about it?