Sales growth eclipsed by online growth

Jane Harper
February 28, 2012
Herald Sun

ONLINE sales are expected to grow by 20 per cent annually over the next few years – dramatically outpacing growth in sales through the traditional store format, according to new research.

The first online retail sales index released by National Australia Bank yesterday found online sales growth eclipsed the 2.5 per cent increase reported by bricks-and-mortar retailers in 2011.

The Online Retail Sales Index showed Australians spent $10.5 billion with online retailers in 2011.

The represents just 4.9 per cent of Australia’s $210 billion retailing industry sector, but the online sector grew 29 per cent in the 12-month period more than 10 times the pace of growth among shop-based retailers.

“I can’t see any reason why this online channel wouldn’t continue growing at 20 per cent for quite some years yet,” NAB’s group chief economist Alan Oster said.

“Retailers need to realise the way they have been interacting with their customers has changed.”

Fears that the high Australian dollar is tempting consumers to spend their money on overseas sites appear to be unfounded, with only 20 per cent of online sales made internationally.

“If you asked people, most would probably think those sales were the other way round,” Mr Oster said.

“Most people seem to assume the proportion of international sales is very large.”

Mr Oster said online sales growth last year appeared to reflect global trends, with consumers reigning in internet spending at the same time as bricks-and-mortar sales were suffering.

“That has to do with people being scared about what’s happening in the wider economy,” he said.

Online auctions, department stores, fashion, cosmetics and variety stores took 47 per cent of online sales in 2011, with groceries, liquor and specialised food making up just 13 per cent of sales.