Is Online Shopping Killing Traditional Retailers?
Is online shopping really killing our bricks and mortar retailers?
Recently there have been numerous blogs, articles, discussions and predications regarding the ‘demise’ of the retail industry in Australia as a result of online shopping; especially with sales lost to overseas suppliers. But some interesting statistics in the latest November issue of Marketing Magazine Australia, give us encouragement.
Read on to find out more.
- Online sales in Australia grew 25% EOFY 30/6/12 to $11.7 billion but they still only make up 5.3% of all retail purchases which only grew 3.5% in store.
- Domestic online sales accounted for 72% of all online sales which are growing faster than international online sales.
- As a single entity, the top 15 online retailers are bigger than Myer and David Jones and on par with market leader Big W.
- 48% of the online spend is from a combination of auctions, department stores, fashion, cosmetics and variety stores.
- 20% of the online spend is from recreation, toys, games, hobbies, books, movies and music.
- 19% of the online spend is from home, furniture, appliances and electronics.
- 13% of the online spend is from groceries, liquor and specialised food.
The retailers who have embraced online shopping as an added channel to promote and enhance their businesses have weathered the storm, with online shopping creating a multitude of opportunities for other businesses who would otherwise not be able to compete in world of bricks and mortar.
When researching this topic, I found some key reasons why people shop on line and the link between researching and shopping on line.
Why are Australians changing the way they shop?
1. Websites are cheaper to set up and maintain, so saving may be passed on to the customer.
2. You don’t have to leave home to go on a shopping spree, you don’t have to shower, get dressed, look presentable or try to find a way to the store and/or carpark.
3. Some consumers stay away from crowded stores and pushy sales people.
4. It’s easy to compare products.
5. Choice is almost unlimited.
6. Shops are open 24/7.
According to a recent study by Barbara Gligorijevic. Queensland University of Technology, “When consumers are able to find useful information easily on line, they are more likely to purchase from a retailer who provides that information, either in store or online.”
IBM recently surveyed 2600 Australian consumers and found that;
92% use websites to compare price 76% use websites to source discount coupons 75% used their mobile to find a local store 70% like to view products before visiting a physical store.
While online transactions are now safer than carrying money in your wallet/purse (most of the time anyway), the world market has never looked so attractive. Choice is almost limitless, prices are down and there’s no need to traipse around the streets looking for suitable products any more unless you, like many consumers, enjoy the social interaction of the shopping experience.
So is it really the businesses online that are killing retailing or is it retailers not adapting to the change in consumer behaviour that are to blame? Let’s not forget the GFC and the fear people are experiencing, some of who are now reducing credit card debt after the uncertainty of the effects of the carbon tax. People are trying to budget for future increases in electricity and other living/running costs. Consumer and business spending is down due to a number of factors which means businesses have to work harder to maintain or increase their market share.
This is a great time for any business to capitalise on the opportunities available in the digital space, but even more so if you are in retailing; whether in a small regional or a large national or multinational market. Never before have we had the channels readily available to building customer relationships, a broader community, engagement, loyalty and word of mouth evangelism.Online Marketing and tagged Hall of Fame Marketing Bendigo, Online Marketing Bendigo, Promotions in Marketing Bendigo