Global survey puts us in the picture.
A global survey of 110 retailers by Citigroup has revealed that Australian retailers are still not keeping pace with their international counterparts despite significantly increasing their investment.
Citigroup Australia and New Zealand head of retail, Craig Woolford (pictured below)claims that, “Australian online retailers playing catchup,” and warns that most ASX-listed retailers make around 5% of their sales online, compared with the global average of 11%.
Harvey Norman had the lowest online sales at just 0.08%, JB Hi-Fi was on 2.5%, and Bunnings on 1%— less than half the online penetration of their offshore peers.
In particular, Coles and Woolworths appear to be challenged in converting their physical presence in the $90 billion grocery sector into online sales.
“However, Australian retail spend online is near 11 per cent, reflecting consumers bypassing ASX-listed retailers,” Woolford said, estimating that Woolworths generated 3% of total sales online and Wesfarmers 2% in the 2015 financial year.
“Australian supermarkets are below global peers, with the average proportion of sales generated online for global supermarkets at 4.7% for the likes of Tesco, Ahold and Morrisons,” according to the report.
The best performing local retailers were handbags and luxury fashion accessories brand Oroton, which booked 8.4% of its sales online, and Specialty Fashion Group, which made 6.5% online sales.
Woolford said globally, two-thirds of the 110 retailers surveyed had some omni-channel capability such as click-and-collect.
“However, the pace of online growth is generally slowing and less than one in five global retailers have bricks-and-mortar sales growth accelerating,” Woolford said.
“We find many retailers have experienced cannibalisation through online from their stores. Creating incremental profits depends on the ability to minimise logistics cost and maintain gross margins.
“Amongst Australian stocks, Oroton and Specialty Fashion have the highest online penetration and are more advanced in their systems capability.”