This chart shows how small online sales are in Australia in major spending categories compared to the cash shoveled through the doors of traditional shop-based retailers.
It’s hard to be precise, to unravel the Australian Bureau of Statistics numbers as they relate to online. The best measure currently is the monthly index created by the economists at the National Australia Bank.
They estimate that Australia’s online retail spending was $14.9 billion for the year to January. That represents about 6.5% of traditional retail spending. Home grown Australian retailers have the largest share of online sales, almost three-quarters of the market.
To put that into perspective, traditional retail spending does more than that each month, or about $22.8 billion.
Investment by the major department store retailers follows the strategy of selling on platforms wherever the customer is: the store, online or a combination of both such as order online and pick up at the store.
The online side of their businesses is still very small but the growth is good.
David Jones this week reported online sales up 220% in the six months to December but overall this represented just 2% of total sales. The company believes that online will be about 10% of sales by 2018.
Myer expects it will take another five years to get online to 10% of sales. This financial year it forecasts that its online business will break even for the first time.
Online spending is getting the growth, 11.3% for the year, and a better result than the 6.2% for traditional retail.
However, the growth has been slowing. The latest numbers are nowhere near the 20% to 30% annual increase in online sales in recent years.
Industry analysts IBISWorld also see a slowing in growth, saying it’s expected to taper in the coming years.