New Zealand companies targeting the Australian retail market should be aware of how quickly the online market is growing.
Many established Australian retailers are moving online, as well there are a number of pure online startups and increasing competition from large international players particularly in the apparel space.
Analysts expect total online retail sales in Australia to grow from AU$16.9b in 2009 to over AU $37b in 2013. This figure includes online purchases from both local and overseas stores.
Some of Australia’s most successful online start-ups include CatchOfTheDay, Greys Online, BrandsExclusive and Appliances Online. Both Catch of the Day and Greys Online have recently announced plans to launch apparel sites. Online auction site eBay has also launched a fashion initiative, initially focusing on 28 local labels and some international brands.
New Zealand businesses are already partnering with some of the larger aggregator sites in Australia such as:
- www.Styletread.com.au (online shoe retailer, plus fashion accessories) - stocks Rodd & Gunn
- www.asos.com (UK online apparel retailer which recently launched an Australian facing site offering) - features several New Zealand brands including HOTmilk and Paris House.
- www.mycatwalk.com – Karen Walker eyewear, Lonely Hearts, Stolen Girlfriends Club
Two of Australia’s department store chains - David Jones and Myer - have been slower to move online. They have both launched online stores but so far only have a fairly limited range of stock. Myer has said it will spend an additional AU$9m to upgrade its site.
Deloitte Australia recently issued a point of view on online retailing saying they believe many existing retailers are not moving quickly enough to capture this booming area of opportunity.
The point of view, ’Move quickly to capitalise on online retail’, says almost all retailers should be focused on online for two key reasons: growth and superior margins. Online sales are growing as a proportion of overall retail activity and foreign retailers’ slice of the pie is increasing as the strong dollar boosts Australians’ purchasing power overseas.
Deloitte notes opportunities for specialist players in areas such as sporting equipment, cosmetics, pets and toys. “There are also some attractive niches around specific needs or events. For example, major department stores do not serve the need for online wedding registries. This has left the door open for homewares retailers such as Peter’s of Kensington and online specialists such as The Wedding List Company.”
In addition, Deloitte believes loyalty programs are a major ‘sleeper’ in the online retailer landscape. Companies that have high-quality customer information and powerful analytics capabilities can leverage this to gain a significant advantage.
Showing how hot this topic is, Australia’s largest online retailing conference – Online Retailer – attracted record crowds this year. Among the exhibitors were two of New Zealand’s leading online retail service providers Solutionists and EstarOnline. Both companies have developed online shopping sites for a range of leading New Zealand and Australian brands.
For more information contact: Sara Lochore, NZTE Melbourne, email sara.lochore@nzte.govt.nz
Related links
Deloitte point of view - Move quickly to capitalise on online retail
Power Retail - www.powerretail.com.au
Online Retailer trade event - www.onlineretailer.net
(The website has keynote presentations from the 2011 conference)
Smart Company – list of Australia’s e-commerce superstars
