Christmas spending sees online onslaught gathering speed

BLAIR SPEEDY
FEBRUARY 06, 2014
THE AUSTRALIAN
THE growth of online retailing accelerated in December, with internet purchases now equivalent to 6.5 per cent of spending with traditional bricks-and-mortar retailers, according to NAB’s Online Retail Sales Index.
The December reading for the index was 240 points, up from 237 in November, and was 12.6 per cent ahead of the same month a year earlier — a strong pick-up from the 11.2 per cent year-on-year growth seen in November and 10.7 per cent in October.
News of the acceleration follows a strong Christmas for online retailers, with major players such as Harvey Norman reporting a doubling in internet sales over the festive period and Myer having to shut down its website for a week after its systems were unable to cope with a deluge of Boxing Day bargain-seekers.
On a three-month moving average basis, online sales expanded 1.58 per cent in December — down from 1.65 per cent in November but more than twice the 0.6 per cent growth seen from traditional retailers in November, the most recent month for which the Australian Bureau of Statistics has released data.
NAB noted the recent growth followed a relatively flat period between August and October, with the improvement trend spread across all categories.
The strongest product segment was in electronic games and toys, where sales were up 32 per cent thanks to the release of new games consoles such as the Xbox One.
Grocery and liquor sales were also up strongly with growth of 24 per cent, as supermarket giants Coles and Woolworths aggressively pursue online sales with smartphone apps, virtual stores in commuter hotspots such as train stations, and offers such as free delivery.
The only category to experience a downturn in sales was personal and recreational goods, although NAB noted the 1 per cent decline was less than the fall seen in November.
Online retail spending over the 2013 calendar year totalled $14.7 billion, or 6.5 per cent of spending with physical retailers excluding cafes, restaurants and takeaway food outlets. For 2012 a total of $12.8bn was spent.
The NAB figures appeared to confirm ABS figures last month that showed that purely online retailers were outpacing their bricks-and-mortar competitors in terms of internet sales growth.
The ABS reported that purely online retailers grew monthly sales by 17.5 per cent between March and September last year, compared with a 12.4 per cent increase in online sales from traditional retailers pursuing an “omni-channel” strategy.