The Sharp Rise of Online Retail Sales in Australia

Year after year, online retail sales in Australia continue to increase, even as the International scene has shown a slight decrease. There’s no doubt that investing in online sales strategies is a winning one when it comes to the Australian market place. Still not convinced? Take a look at the latest metrics that reveal online retail sales in Australia as: 1. A proportion of total retail spending, 2. Total spending, 3. The absolute growth rate, and 4. The relative growth rate in online retail sales when compared to traditional retail sales.

What proportion of retail spending is devoted to online retail sales in Australia?

According to the NAB Online Retail Sales Index, the indepth report for 2014 states that about 6.5% of total spending comes from online retail sales. That means that for every $15 spent on retail in Australia, at least one of those dollars was going towards an online purchase. The yearly increase from January 2013 to January 2014 was an astounding 11.3%. The big winners were domestic online retailers in Australia versus international online retailers. The demographics showing the strongest sales were those people in between the ages of 35 to 44. The weakest sales came from the demographic of people 65 years or older. There was some regional variation, with New South Wales, Victoria, and Queensland generating most of the online sales. With only $1 going towards online retail sales for every $15 spent there is a potential for online sales to grab an even greater share of the market place as time goes on.

How much total spending is devoted to online retail sales in Australia?

The total sum, according to the NAB report, is $14.9 billion dollars. That’s right; it’s BILLIONS of dollars’ worth of spending that is happening in online retail in Australia every year. To put it into perspective, it almost equals the entire economic output for the Northern Territory in 2013. If you were looking at the total spending when compared to the revenues generated by some top Australian companies, it would be bigger than Origin Energy, Optus, and IAG. In other words, total online retail spending, when looked at compared to company revenues would be in top 15 of all revenue-generating companies.

How are online retail sales growing in absolute terms year after year in Australia?

The absolute growth has been phenomenal and the trend is towards even greater growth in the future. The rise of online retail sales has even rivaled the Chinese economic engine, which economic experts say has been unbelievably good. Currently, the annual growth rate of China is about 7.5%, but online retail sales keep climbing, hitting a high of a 30% year on year growth rate in the past, even though now the absolute growth rate may be slightly lower internationally. To get an idea of how the growth rate compares to something like the economic growth rate of China, one has to take a look at individual categories. The growth rate also depends on the category of online retail sales being purchased. Great strength is found in categories like Groceries & Liquor, Electronic Games & Toys, and Media. The Groceries and Liquor online sales experienced the largest year-to-year growth rate from 2013 to 2014 at 27%. Next, the Electronic Games and Toys category showed a surprising 22% growth rate for the same year-to-year period. Trailing these two categories, but still showing remarkable growth, was the Media category. It had an growth rate of 18% for the same year-to-year period. For the first month of 2014, Department and Variety Store online retail sales surged ahead. This trend should continue as traditional brick-and-mortar retail stores engage online sales in a bid to compete more effectively in their economic sector. The categories with declining growth for January 2014 appear to be Daily Deals and Personal & Recreational Goods, but they might be subject to seasonal variations.

How do growth rates in online retail sales compare to traditional retail sales in Australia?

In relative terms, the online retail sales growth rate has far outstripped the traditional retail sales growth rate. Online retail sales have increased over 200% between 2010 and 2014. With only 6.5% of total spending coming from online retail sales, there is plenty of room to grow further. In comparison, traditional retail sales have had a strong showing of 15% growth, but obviously falling far short of the potential growth rate offered by online retail sales. The number of people shopping online in Australia has now crossed the 50% mark and will continue to drive online sales growth well into the future.

Why are online retail sales red hot?

The continuing rise of online retail sales has much to do with evolving technologies, like smartphones. Consumers have gotten very savvy about shopping while in retail stores, often pulling out their smartphones to see if they can get a better deal online. This has forced traditional retailers to take online sales very seriously. Those that don’t end up falling behind, competing with others who do have online retail sales available for their customer base. Online websites have also advanced with ecommerce website design. An ecommerce website can allow retailers to service many more customers than those that might physically come into a store, all at the same time. They can automate many functions that would normally cost a traditional retailer some extra cash to offer in person. An ecommerce website also offers a virtual inventory, in comparison to traditional retailers that must stock physical goods in their inventory. This offers a huge advantage to online retailers because they don’t have to buy things until they are actually sold, doing an inventory on demand business model. They save money on renting space, and they can offer items online that they would not be able to offer in a traditional setting because the odds of selling it to that one odd customer are much lower in a brick-and-mortar store than online. Savvy business owners, who finally understand the unique advantages that online retail spaces offer them, can also generate much greater exposure for their product offerings. They can create coupon codes without actually printing coupons, thus saving money, but still offering discounts to their loyal customers. The sale can be generated automatically, without the need of a checkout clerk, since many online buyers are very familiar with online checkout processes now. People are much more confident about using their credit cards online, than they were in the past, and security has increased over the years.

Online Retail is the Way of the Future

Retailers, who want to catch the swells of the waves crashing on the online retail shores of Australia, will be rewarded with increasing sales going forward, particularly if they take a dynamic approach to their website. It’s no longer possible to just create a static website and then check in on it sporadically. Online retailers have to be more active in their website management, including dynamic content that brings new viewers in on a daily basis. They have to understand how to market their online offerings in different areas of the web, from social networking sites to online forums and market places. They must stay on top of the latest online trends and try to get in on the action early. For instance, one of the biggest trends in website creation for 2014 is responsive design to accommodate multiple platforms from smartphones to tablets, as well as laptops. Those businesses that do invest in online retail sales strategies will be able to surf the web to greater sales and brand exposure than those that don’t, reaping dividends with greater online revenues.


Business NAB (2014) NAB Online Retail Sales Index. Retrieved from: Bainbridge, A. ABC Australia (2013) More than 50 per cent of Australians shopping online: Roy Morgan research. Retrieved from:

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