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Guest blogger- Teresa Sperti – retail online in Oz


 With over 9 years of marketing experience across automotive, finance, travel and publishing sectors, Teresa looks forward to contributing to the growth of the internet retailing and online industry in Australia.

 It’s Time To Get Serious About Online Retailing in Australia -Teresa Sperti

With Australians spending more time online than ever, the cost of broadband falling and speed improving something big is going to happen. The digital industry and in particular online retailing is about to explode in Australia, but not before some of the big retailers get serious about the opportunity.

This article reviews 3 sub-sectors of online retailing – groceries, consumer electronics and fashion – to identify the true opportunity for these segments in Australia.


Current State of Play;
According to Aus Food News approximately 5 per cent of Australians will purchase groceries and food online, making it the second least likely category – only ahead of furniture and homewares. Compare these figures to the UK, which is at 19%, and it is easy to see how far this segment is behind other global markets. What’s more in the UK, grocery shopping is now the largest online shopping sector – representing 31% of total online sales.

The opportunity
Whilst the portion of Australians purchasing groceries online is small, the opportunity is a lucrative one. However spending time on both Woolworths and Coles sites demonstrates some of the issues with the current online offerings. In particular delivery times of up to 4 hours, site loading times and the general user experience is hindering the growth of this market. And for the grocery market, usability will be a critical success factor. Those between the ages of 44 and 54 are the most likely group to purchase groceries online, with about 10 per cent willing to do so. However as this age group have not grown up with technology an interface that is simple to navigate is key.

Additional barriers which need to be considered are those pertaining to concerns over quality and freshness which is a deterrent for online grocery shopping. This is of particular importance for Woolworths whom prides itself on quality of produce.

Consumer Electronics
Current State
of Play;
If there is one sector which should have smiles ear to ear about its online potential it is the consumer electronics sector. A survey by Deloitte found that 23% of Australian would buy consumer electronics online. In addition year on year growth in search volumes (refer below) for related categories demonstrate that consumers are spending an increasing amount of time searching for consumer electronics online.

Search Volumes
• Laptop-related queries were 54% higher in March 09, compared with March 08.
• Consumer Electronics-related queries were 54% higher in March 09, compared with March 08.
(Stats from Google, Mar 09)

The opportunity
Despite the statistics at least one big brand is yet to be convinced about the potential of the online channel. In a recent interview, JB Hi-Fi’s CEO stated that the online store only contributes 1% of total sales and this will not change anytime soon. Thus although there are many positive signs does this sector have potential if one of the largest players is not able to monetize the online channel?

The JB Hi-Fi example is one online store of many that will in the coming years not live up to expectations. This is not because the online channel is not a lucrative proposition but the online experience lacks strong execution to provide the user with a unique online value proposition and user experience.

In the current economic downturn, consumers more than ever are looking online to secure the best price for electronics thus now more than ever the consumer electronics sector should be experiencing growth online. However to be successful brands need to provide valuable content to allow consumers to compare and contrast prior to making the decisions and review their experience post purchase. Without this, these high involvement decisions will continue to drive consumers in-store or to competitor sites so they can obtain the information they desire to make decisions.

In addition, there is a growing global trend which sees many consumers put the item on-hold online and pick it up in store. This trend is one which could significantly benefit both consumers and the brand in the electronics sector. This strategy provides consumers with the reassurance they need instore before making the final transaction and enables brands to understand the true value driven through their online store.

Current State of Play
In the UK, online clothing and fashion represents 21% of all online purchases and in the past year online sales have grown 17% despite the overall sectors decline. Closer to home though, statistics about size of market or consumers intent to buy online are more difficult to come by. If however Google search volumes combined with overseas success provide any indication about the market potential, the clothing and apparel segment is set for solid growth.

Australian Search Volumes
• Shopping-related queries were 22% higher in March 09, compared with March 08
• Apparel-related queries were 34% higher in March 09, compared with March 08
• Queries for Clothing labels and designers were 29% higher in March 09, compared with March 08
(Stats from Google, Mar 09)

The opportunity
For clothing labels to be successful online there are some hurdles that must be overcome and if done effectively, the organisations that do so could reap the rewards.
The big difficulty for online clothing retailers is the inability for consumers to touch or try on the product. To combat this one of the critical success factors is return policies to enable consumers to minimise the risk. However that said, some items should be easier to retail online than others. Items such as night ware or repeat purchase lingerie should benefit from the opportunity if the online experience is a good one. That said even in this category, some of the major retailers a missing a trick.

Above all else, my personal belief is that the potential of the Australian online retailing industry lies in the hands of the retailers themselves. Without a range of online stores from the larger/trusted brands across the online retailing segment, Australians are not empowered to shop online. So before organisations judge the true potential it is important that the appropriate investment is made in both the website and online promotion and that the critical success factors are clearly defined. Get this right and for most brands – online retailing will add another profitable channel to the existing bricks and mortar establishment.

 Teresa Sperti, is the author of Digital Marketing Lab and is an Australian client side digital marketing expert living in Melbourne.

With over 9 years experience as a marketing professional, her knowledge base extends across the digital landscape with expertise in;
• Digital strategy and planning
• Paid and organic search marketing
• Website development and analysis
• Email marketing
• Social media marketing

Twitter – @DigitalMLab

Linked In – Teresa Sperti


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