Australian online shopping segment worth $18.3 billion: report

Market will make up 9.8 per cent of all retail sales by 2017, says Frost & Sullivan

The online shopping segment in Australia is forecast to be worth $18.3 billion in 2013, with an average spend per consumer of $1750, according to a new Frost & Sullivan study.

The report, entitled Australian and New Zealand Online Shopping Market 2013, found that the segment accounts for 7 per cent of total retail sales. The study was based on a survey of 1000 Australian consumers. Ninety per cent of respondents said that they expect to increase or at least maintain their online spending over the next 12 months.

Based on the findings, Frost & Sullivan Australia and New Zealand ICT practice research manager, Phil Harpur, forecast a compound annual growth rate of 13.1 per cent.

“Online sales as a percentage of total retail sales are predicted to increase from 7 per cent in 2013 to 9.8 per cent by 2017,” he said in a statement.

This was because a greater variety of goods from Australian and international retailers had stimulated online purchases.

According to Harpur, consumers had also become more comfortable with the security and delivery process involved with online shopping.

In addition, the strength of the Australian dollar contributed to healthy online sales figures.

“The recent fall in the value of the Australian dollar will reduce the attractiveness of shopping on overseas sites,” he said.

“Seventy-nine per cent of Australians who shop online currently purchase from overseas sites to some extent and an estimated 45 per cent of Australian online expenditure goes to overseas-based websites.”

However, over the past two years the proportion of online shoppers in Australia shopping on local sites increased from 21 per cent in 2011 to 29 per cent in 2013.

Harpur said this was because Australian retail chains such as Harvey Norman, Myer and David Jones had improved their online offerings.

Turning to mobile shopping, the study found that 30 per cent of Australian Internet users aged between 15 and 65 had purchased goods online during the last 12 months via a smartphone, whereas 19 per cent purchased items via a tablet.

“The immediacy of mobile devices gives online retailers significantly more opportunities to engage shoppers with relevant offers when and where they are making buying decisions, encouraging impulse purchasing,” Harpur said.

For example, 52 per cent of smartphone consumers used their device to find a nearby store while 38 per cent used it to compare prices before shopping for items.

According to Harpur, traditional retailers have the ability to implement a bricks and clicks strategy which will allow them an advantage over companies with an online strategy.

“For example, retailers can make the process of shopping online and in-store [sales] work effectively," he said. "[This can be done] by integrating in-store stock and sales systems to their digital platform or by providing in-store kiosks where consumers can order online in-store and have purchases delivered to their home at a later date."

Follow Hamish Barwick on Twitter: @HamishBarwick

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Tags retailFrost & Sullivanonline shoppingecommerce

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