Tuesday, January 18, 2011

Australia's Online Retail Market Heating Up in 2011

The recent debate in Australia about the imposition of the GST on overseas online sales for orders less than $1,000 dominated the news over the Christmas/New Year period. It is a sign that online retail is starting to have an impact on traditional retailers and it's hurting.

To gain a broader idea of this it's worth taking a quick look at the way in which the Australian online retail market has been emerging from its period of "don't go there" that the last decade represented and how retailers are now scrambling to get their businesses online.

During 2010 we saw a significant shift in the thinking and investment towards ecommerce by some of the bigger players in the market. Well known retailers like Clive Peeters, Strathfield and BigW launched their online stores and we saw the re-entry to online sales by the large department store chain David Jones. This was notable because of the huge failure of their original venture back in April 2000 at the same time as the dotcom bubble burst.

The biggest entry into the market in 2010 was that of Westfield, who is now beginning to carve its niche in cyberspace. Much as it has become the dominant player globally for its quite extraordinary shopping centres, it also has shown that it can equally produce brilliant online experiences. Launching in November 2010, the site provides more than 150,000 products representing over 3,000 brands across 50 retailers. An impressive line-up.

One of the benefits to customers of the Westfield site is the services it offers customers: the approach to managing orders (a single invoice for a variety of products across many suppliers), free delivery from many of the stores (although usually with a minimum order value) and straightforward returns management (although this is managed at the store level).

It is this level of service, not the issue of GST, which will ultimately benefit Australian consumers and bring them back to supporting Aussie stores. Westfield becomes a champion of the Australian shopper, something Gerald Harvey and Myer may want to look at.

We can expect this retail revolution to continue to gain momentum in 2011. Gerald Harvey has indicated that he is finally taking Harvey Norman online in February. Meanwhile, we will also see the entry of new players, such as Taste. This is the retail ecommerce project that I have been project managing with a specialist team of programmers, content editors, interior designers and retail experts. Taste promises a new experience in homewares and home transformation and is building one of the most comprehensive clicks-and-mortar approach to retailing Australia has seen.

With all this competition, Australia is finally beginning to enter the world of sophisticated online retail that markets such as the US and Europe have been enjoying for many years. These are exciting times.

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