Big retailers vie for $30b online share

ONLINE OPPORTUNITY KNOCKS: Big Australian retailers are now joining the $30 billion online market. Source: The Courier-Mail

IT seems to have finally clicked for Australian retailers.

After more then a decade of resistance, big-name businesses are scrambling for a share of the country’s $30 billion online commerce market.
A nightmare year for retailers has been the push many needed to explore new selling avenues online, but investors remained pessimistic about the sector’s outlook.
Department store Myer was one of the worst performers when the share market opened after the Christmas break, down 1.8 per cent in value to $1.955, the lowest since listing in October 2009.
Rival David Jones had lost 2 per cent in value to $2.38, while Harvey Norman was 2.1 per cent lower at $1.81 and electronics retailer JB Hi-Fi had lost 2.5 per cent to $11.35.
The shareholders’ blow to Myer came despite a push into new territory for the business, which launched its stocktake sale on its website on Christmas Eve for the first time.
“We are really concentrating on the omni-channel approach,” Myer chief Bernie Brookes said.
“Whether you want to buy online, collect in store, get it delivered, try on in-store then buy online whatever combination you want, we can provide that.”
Mr Brookes has ambitions for Myer to become the nation’s biggest online department store, with a $9 million investment in a website with the capacity to sell 250,000 items, while rival David Jones expects to launch its new 50,000-product website in 2013.
The internet is also fast emerging as the latest front in the Coles and Woolworths supermarket war, with both stores boosting their online and mobile services.
While online only accounts for $800 million, or 1 per cent, of supermarket sales in Australia, the potential has been demonstrated overseas, where online accounts for 3.2 per cent of the market.
Harvey Norman broke new ground last week by launching an Ireland-based website to sell cheap video games by exploiting a loophole allowing goods under $1000 to be imported GST-free.
“If you can’t beat them, join them,” said chief Gerry Harvey, who earlier this year bore the brunt of criticism from shoppers after he led fellow retailers Myer, David Jones and Target in a crusade to change the import laws.
The website, which can cut up to $25 off in-store game prices, attracted 147,000 visitors in its first 24 hours and sold just under 200 games.
Deakin University retail industry fellow Steve Ogden-Barnes said there are very few products that could not be sold online, forcing retailers across the sector to carve out a niche.
“Anyone who thinks their category is above all that is deluding themselves,” he said.
“As a retailer, if you don’t tap into that, someone else will.”


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