Recent findings show that 43% of all Australian online sales are going to foreign retailers. Many foreign retailers are proving successful at targeting the Australian domestic market, leaving Australian retailers in their wake.The findings come from three sources, Google data analysis, direct marketing company Salmat and a report titled Global Retail Insights produced by the Australian Centre for Retail Studies (ACRS). ACRS representative paints a pessimistic picture of the future stating “Overseas retailers are definitely on the attack. About 43% of local sales online are going offshore…My gut feeling is the penetration rate will be increasing in the next few years…They’re got the stocks, the brands and the distribution systems in place.”
The main threats come from UK department stores closely followed by US retailers. Although Australia is considered a relatively small market, it is a market worth tapping into. It is easy for US and UK retailers to appeal to the Australian consumer due to the similarities in culture.
What can Australian retailers do to stop the aggressive take over by foreign companies?
The problem is not that Australians don’t want to shop domestically it is that the options online are lacking. Research shows that 68% of Australians like to support the Australian economy by shopping domestically. Australian business owners need to wake up and get to grips with online shooping .
It is time that Australian retailers got creative with their marketing and start providing more online sales options. The UK and US retailers are more internet savvy and can utilise advertising options such as Google ads to target the Australian consumer in local search. Consumers require websites to be fully transactional and include pre-purchase research resources.
The other big factor that Australian retailers must consider is ‘mobile.’ Needless to say that the mobile invasion is almost complete with the multitude of awesome mobile products available from iPhone to Androids. For example Google reports that over Christmas 2010, 17.5% of retail searches happened on a mobile device. Also if we look at the case of Lasoo, since the launch of their iPhone application they have recorded 15 million catalogue page views a 1,500% increase in their mobile search rate.
Online retailing is not just about having an online shop it is about brand building across multiple channels. Through social media, web 2.0 and search, retailers can direct traffic to their site with the hope of turning that traffic into revenue. The US and UK are way ahead of their Australian counterparts in multi channel strategic online marketing which is off putting for investors. It may be that the Australian retailers are playing catch up but without the investment it will just stagnate and leave their domestic market free for the takeover by foreign business.