Internet Boom: "Currency Related" Or OZ Retailers Finally Cracked IT?

Written by Oonagh Reidy     07/03/2014 | 10:19 | Category: INDUSTRY

Both, says Nab Chief Economist

Internet Boom: "Currency Related" Or OZ Retailers Finally  Cracked IT?Yesterday, it emerged international e-tailers sales growth has come to a virtual standstill in January - rising just 0.3% V's domestic sites which rose 1.6%, according to NAB Online Retail Index. 

So, are consumers shopping local due to the value of the Aussie dollar or are retailers like Myer, Appliance Online luring the consumer back with better online deals, service? 

"Currency is one of the important issues but is also due to bricks and clicks (retailers) getting their act together," Alan Oster, NAB Chief Economist told ChannelNews. 

'Bricks and Clicks' refers to retailers like Myer, JB Hi Fi and Dick Smith who have both bricks and mortar and online store presence.  

The latest growth surge in online sales is coming from existing 'bricks' rather than 'clicks' or pure online players. Almost three out of four internet purchases made by consumers are from Australian websites. 

However, this could change if the currency situation reversed and the dollar became stronger, although "its hard to tell how much", says Oster.   

Several major retailers have only recently upped the ante on e-tailing and now reporting massive surges in online sales -David Jones said Q214 web sales soared 150%, albeit form a low base level. Most retailers, including JB Hi-Fi, say internet sales account for 2% of the total figure. 

Australia's online spend climbed 11% to $14.9 billion for the year to January, according to NAB Online Retail Index, or  6.5% of traditional retail spending and is set to rise further, analysts predict. 

ABS figures, released this week show traditional Australian retail sales rose 1.2% in January, seasonally adjusted, following a rise of 0.7% in December.

Turnover rose 6.2 per cent in January, seasonally adjusted, compared to January 2013. 

Other retailing including books, cosmetics rose +1.9%, household goods (+1.5% although electronic goods fell -0.2%), department stores (+2.6 per cent) and food all rose.   

Nab figures estimate online sales grew 1.3% in the first month of 2014, while traditional store sales rose just 0.4%.