Hey Big Spender: Aussie Online “Spike”
Australia’s online spend has climbed 11% to $14.9 billion for the year to January, according to NAB Online Retail Index. E-sales increased 1.3% in the first month of 2014, while traditional store sales rose just 0.4%.
Update: ABS figures, released today, show traditional Australian retail sales rose 1.2% in January, seasonally adjusted, following a rise of 0.7% in December.
Other retailing including books, cosmetics rose +1.9%, household goods (+1.5% although electronic goods fell -0.2%), department stores (+2.6 per cent) and food all rose in January.
Internet purchases now account for 6.5% of traditional retail spending, and will soon hit 10% analysts predict.
In January, there was a “spike” in online sales of computer games & toys (+3.5%) driven by the release of PS4 and XBox One, homewares and appliances, too, was a big winner climbing 17%, Department stores (+34%), Groceries & Liquor and Fashion.
But the good news for Aussie retailers, who only recently got their online strategy in gear – is domestic websites control the lions share of online spending – at around 74%.
All major retailers including Dick Smith, JB Hi-Fi, David Jones, Coles and Woolies have all reported surging e-sales in their latest financials. Domestic retail sales grew 1.6% compared to international sites which jumped just 0.3%, in January.
Per state, NSW and Victoria residents were the biggest online spenders, likely due to the better delivery options in these heavily populated states.
Biggest online spenders by age were 25-54 year olds. Despite a recent pickup in bricks and mortar retail, it was still outpaced by the online surge in the past three months, says Alan Oster, Group Chief Economist, NAB.
The “virtual stall” in growth in international online sales is probably currency related. A substantial gap now exists between the stronger growth in domestic and international retail.
“In both online and traditional retail the biggest story to emerge from the festive season was actually the dominance of domestic retailers,” says Tiernan White, Head of NAB Corporate (NSW).
“We have increasingly seen Australian bricks and mortar retailers develop sophisticated online offerings that complement their traditional storefronts.”
However, recent online growth has been more subdued than the 20-30% growth rates recorded in earlier years.
Demand for online Media like subscriptions slowed during Nov-Jan, along with Daily Deals from Groupon. Living Social and Co, Recreational & Personal Goods like golf balls and sporting equipment.