So many people in retail in Australia are asking about the future of shopping, in particular, online sales. The retail market has been shaken by the rapid growth of the online commerce market. 2011 saw online sales reach $29.7 billion and they are forecast to reach sales of $34.8 billion by 2013. So what is selling and why is it growing so quickly?
Groceries and travel combined make just over a third of Australian online sales. Travel will continue to draw the highest online sales reaching a forecast 28% of all online spending by 2013. Groceries (pantry, household items, alcohol and other consumable goods) currently rate second in sales but will most likely be overtaken first by appliances and home improvement and then computer related purchases. Appliance, homewares and consumer electronic online sales have grown thanks to the rapid technological innovations being made and their consumable nature.
However the strongest growth in sales is in fashion. Apparel, accessories and footwear are expected to show a growth of 24% between 2011 and 2012.
PayPal has reported a huge growth in mobile payments of 500% in 2011. The good news is domestic online spending accounts for 70% of sales. That Australians prefer to buy from local retailers augurs well for businesses who adopt an online commerce strategy.
Many Australians, both consumers and retailers, are only now just beginning to participate in the online shopping process. Consumer aptitude and confidence with purchasing on the internet is improving and this will be reflected in the growth of sales.
Retailers who integrate their offline footprints with an online presence will enjoy a competitive advantage and maintain their relevance in the new retail environment. Their customers will be able to shop across multiple channels. They can make purchases online, say on a mobile device, and collect their goods in store. Combining established retail sales methods with online availability and access will be vital for survival for most retail businesses in the future.
PayPal offers more insights into the future of shopping and online sales.