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Harvey Norman, Kogan Suffer As Online Shopping Reverts To Pre-COVID Levels

The online shopping boom precipitated by the COVID-19 pandemic has eased, with Amazon emerging as the clear winner of the trend, and Harvey Norman and Kogan among those feeling the hit.

A study of the online retail market by analysts at investment bank Jarden found that online retail, excluding food delivery, “is back to the pre-COVID trend as stores reopen, with this set to benefit malls and omni-channel retailers.”

Travel and soft goods were the only two growth categories over the three months to August.

“By brand, traffic was strongest for Flight Centre,” wrote analyst Ben Gilbert, “while soft goods improved.”

The best performers were Kathmandu (up 30 per cent), Mitre 10 (up 25 per cent), City Chic (up 16 per cent), Just Jeans (up 12 per cent), and Nick Scali (up 9 per cent).

The biggest drops were seen by Harvey Norman, Kogan, IGA, Hype, Platypus, Dinnerly, Youfoodz, Dusk, and Adairs.

“For those with omni-channel offers, we note the net impact is still strong positive sales, given the lift in store traffic,” notes Gilbert.

“Looking forward, we are becoming increasingly cautious on the consumer outlook, with savings rates falling, costs up and the full impact of rate hikes yet to hit household cash flow.”

Amazon, meanwhile, has benefitted from the overall shift to online shopping. The retail giant now commands a share of more than 40 per cent of all online shopping traffic in Australia. Gilbert notes this was “aided by increased capacity and a move to next-day delivery in Sydney and Melbourne”.

Jarden analysts forecast Amazon will overtake eBay as the most-visited online store in Australia within the next twelve months.

“We expect market commentary on the competitive threat of Amazon to build, particularly if it was to increase the brand offering in areas such as electronics and build an automated Melbourne distribution centre.”



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