Retailers fight off internationals: local multi-channel spend strengthens

Australian retailers have hit back against large international players, outpacing the growth in online sales shown by overseas giants, recent figures show.

Domestic online retail has shown near record growth in recent months, with sales increasing by 28% year on year in January, compared to 25% year on year for international operators, NAB’s Online Retail Sales Index found.

Domestic retailers accounted for 73% of the $13 billion spent online in the year up to January, with the adoption of multi-channel strategies, live inventory management techniques and enhanced stock turnover credited for their strong performance.

Online retail sales rose to an estimated $13 billion across the year and are now equivalent to 5.8% of traditional bricks-and-mortar sales when food retailing is excluded.

Overall, growth for January was unseasonably strong at 27%.  Even though January is typically a weaker month for the online sector, 2013 experienced a strong post-Christmas period, NAB group chief economist Alan Oster says.

“Online remains much stronger than traditional retail, up just 0.4% year on year in December 2012, on a non-seasonally adjusted basis,” Oster points out.

Trends in the individual sub-sectors of online retailing remain divergent, with ‘Household Goods & Electronics’ showing above average growth over the past three months, after a long period of underperformance.

‘Auctions, Departments & Fashion’ remained the largest sector, grossing almost half (48%) of online sales. ‘Recreation, Toys and Games’ accounted for 20% of spend, while ‘Groceries, Liquor & Specialised Food’ claimed 13%.

Those aged in their 30s and 40s remain the key demographic for online spending, while Western Australia’s share of spending continues to rise, as the state outpaces the rest of the nation in growth terms.

“It’s clear that our domestic retailers are now fully comprehending the potential of the online retail channel,” the report concludes.