Online sales grow fastest for multi-channel retailers
Multi-channel retailers are bullish on growth, with the rate of online sales surging ahead of expectations, new research from Commonwealth Bank shows.
The latest CommBank Retail Insights Report reveals online transactions have increased by 61 per cent for multi-channel retailers since August 2015, when the bi-annual study was first taken.
They now account for 29 per cent of all industry sales by volume, and multi-channel retailers predict this figure will rise to 35 per cent over the next 12 months.
“Retailers maintain a bullish outlook for online sales and yet may be underestimating future growth, as they have previously. They forecasted 24 per cent growth during 2016 compared to actual growth of 32 per cent,” said Jerry Macey, Commonwealth Bank’s national manager for the retail industry.
The research shows company-owned websites are the most common sales channel for multi-channel retailers, with only 22 per cent using third-party websites like Ebay or Amazon to sell products. Only seven per cent of Australian retailers use third-party sites as their sole sales channel.
But Macey believes this will soon change when Amazon arrives, which 11 per cent of respondents see as an opportunity.
“There is significant potential for more retailers to look at third party sites as a viable sales channel, rather than adopting a purely defensive stance,” Macey said.
Improving delivery and return services has remains a top priority for retailers seeking to capitalise on growing online sales volumes.
Click and collect is being offered by 42 per cent of retailers, up from 24 per cent in August 2015. Similarly, 38 per cent of retailers now allow shoppers to return online purchases in-store, up from 23 per cent only 18 months ago.
In addition, the survey reveals that retailers are turning away from conventional digital marketing and sales channels like email and mobile apps, as they focus on those channels that are most profitable, improve customer engagement and foster loyalty.
For instance, more retailers are using live chat to enhance customer service. And while still an emerging channel, a small number of retailers are also using chat bots to service customers.
“Innovation remains a key driver of optimism in the industry. For one in three retailers expecting better times ahead, they say changing strategies and business models, and introducing new initiatives, are more important than simply relying on economic growth,” Macey said.