By Keri Algar
SYDNEY, NSW: Paul Marshall, executive general manager of Lasoo.com.au, begins by admitting that e-commerce remains a relatively small figure when put against total retail sales, but he warns that this is changing rapidly.
“The interesting news is the forecasted growth for e-commerce in the next 12 months [from $24 billion in 2010] to $34 billion in 2011,” he said.
Marshall points out that in 2010 online research influenced 50 per cent of sales that occurred in Australia’s bricks and mortar retail stores, “so the big prize still remains, with a strong focus on reaching and influencing the shopper who is online.”
“Why are people buying online? Price is certainly a factor but it’s not the number one, the number one is convenience.”
As for the GST debate, he said that research shows people are buying offshore for other reasons than GST and that in any case, 68 per cent of Australians actually prefer to spend online domestically. This is split between 24 per cent who prefer to support local industry while 23 per cent do not trust overseas websites and for 17 per cent it is because the item was only available in Australia.
GST is only a small influence. Many retailers argue that customer service and a solid offering on the high street level are crucial considerations.
According to a study by PayPal, 43 per cent of online sales are going offshore.
“The big question for the growth of e-commerce is how much will remain going off shore with the way the Australian dollar is going – it still remains very strong, it’s still above parity at the moment. But what can the Australian local merchants do to win [consumers] back in terms of the two thirds that want to buy from local merchants… why are half of them buying from overseas?
“The other significant figure is that when people pre shop they are not shopping with a particular retailer in mind, they are searching and looking for a generic product, such as an LCD TV or they are looking for a brand, say Sony…only 20 per cent of searches on Google are for retail brands.”
“They key thing is that the local merchants just aren’t really playing the game at the moment – either they don’t have the capability, the range, products and price still remains an issue.
“[Retailers] very much need to address their online strategy, not only their e-commerce strategy but their marketing strategy on line as well.”
One of the trends to keep tabs on this year is the anticipated exponential rise in the number of consumers looking to research retail purchases using mobile devices. 15 million catalogue pages were viewed on Lasoo through mobile devices during Christmas 2010, according to the company.