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Online sales growth outpacing traditional retail

Online retail sales grew 29 percent in 2011, far surpassing growth in traditional bricks and mortar sales for the year.

According to the NAB’s Online Retail Index, the growth rate for traditional retail sales has remained stable in comparison to online, averaging around 2.5 percent. International sales rose 40 percent, slowing in the second half, and domestic sales lifted 25 percent.

In 2011, Australians spent $10.5 billion online, which represents just 4.9 percent of the total traditional retail spend for the year, and despite the well-publicised concern about the bulk of sales going to international retailers, the index found domestic online retailers accounted for three quarters of all sales.

“The majority of Australians say they prefer to buy online domestically, and many have never transacted overseas. Not surprisingly we have seen an increasing number of large international players provide a domestic online presence,” Quantium’s Simon Smith said.

NAB found the largest share of online sales went to ‘Online Auctions, Department Stores, Fashion, Cosmetics, Variety Stores’, accounting for around 47 percent of the total spend. ‘Home, Furniture, Appliances, Electronics’ and ‘Recreation, Toys, Games & Hobbies, Music, Movies, Book’ each represent a 20 percent share of the total online spend in 2011.

In traditional retail, the largest share of sales went to food retailing, where the penetration of online retail has been comparatively weak.

When it comes to who’s spending online, NAB found the bulk of online spending is done by consumers aged in their 40’s, 30’s and under 30’s – with each of these age groups accounting for around 23 percent of the total

New South Wales has the largest share of online retail spend (at 34 percent), followed by Victoria and Queensland. On a per capita basis however, the ACT and the Northern Territory well outperform the other states.

In growth terms, Western Australia recorded the strongest online sales growth over the past year.

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Lorna Brett

Lorna Brett

Lorna was Dynamic Business’ Social Web Editor in 2011/12. She’s a social media obsessed journalist, who has a passion for small business. Outside the 9 to 5, you’re likely to find her trawling the web for online bargains, perfecting her amateur photography skills or enjoying one too many cappucinos. You can follow her on <a href="https://twitter.com/#!/dynamicbusiness">Twitter @DynamicBusiness</a>

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