Department store online sales growth faster than online-only

Consumers are voting with their wallets and spending more money with retailers with both an online and bricks-and-mortar presence.
 
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01.Consumer spending up online

online-shopping

Department stores including Myer and David Jones are reportedly turning around their online shopping fortunes, with omni-channel retailers recording a 22% growth in online sales versus online-only stores’ growth of 13%. 

Credit card transaction data from the Commonwealth Bank is said to indicate that “omni-channel” retailers (those that have both an online and bricks-and-mortar presence) are experiencing faster growth in their online shopping reach than their online-only competitors.

The findings of the report aren’t exactly a shock. The ability to take advantage of a combination of the convenience of online shopping with the satisfaction of going in-store, dealing with someone face-to-face, and getting a product immediately, is clearly an attraction for consumers. And CHOICE has always argued that local bricks-and-mortar retailers have been over-egging the impact of international online competitors on their bottom lines and have lagged in providing appealing alternatives. It also highlights how local retailers have overplayed the threat from international competitors when it comes to their calls for the lowering of the GST low-value threshold.

Bricks-and-mortar stores lay claim to 50% of total online spending on Commonwealth Bank credit cards, according to sources. The data will come as welcome news for bricks-and-mortar retailers who have been playing catch-up to big internationals like ASOS and Amazon

CBA analyst Andrew McLennan told the Sydney Morning Herald: '''It is hard to separate the impact of the weaker Australian dollar, but it looks like omnichannel retailers will continue to regain share previously lost to internationals and the more nimble pure-play online retailers… Gone are the days when domestic traditional retailers sat on the sidelines complaining.''

The news comes on the back of data released by NAB, which found that in the year to January 2014:

  • Australians spent $15 billion on online retail, equivalent to 6.5% of spending with traditional bricks & mortar retailers (excluding cafés, restaurants and takeaway food). 
  • Sales growth for traditional bricks & mortar retail improved in recent months.


 
 

 

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