IT IS NO SECRET THAT THE AUSTRALIAN RETAIL INDUSTRY HAS BEEN SUFFERING IN RECENT YEARS, LOSING A PORTION OF ITS MARKET TO ONLINE SHOPPING, PARTICULARLY FROM FOREIGN ONLINE STORES. LIKE SO MANY INDUSTRIES BEFORE IT, SUCH AS THE MUSIC, FILM AND MEDIA INDUSTRY, THE RETAIL INDUSTRY NOW NEEDS TO FACE THE CHALLENGE OF DECLINING SALES CAUSED BY CHANGES IN TECHNOLOGY – NAMELY, THE INTERNET.
Foreign retailers have successfully embraced the online retail space with online sales making up 10% of their overall sales figures. Online sales for some of Australia’s largest retailers on the other hand, only make up 1% of overall sales. This difference is due to the lack of capital expenditure investment by Australian retailers. On average, Australian retailers invest 35% of their capital expenditure compared to 50% by US and UK retailers. To effectively compete against the trend of losing sales to foreign online stores, Australian retailers must act now.
“The online shopping trend is growing rapidly as consumer confidence increases. Many retailers in overseas markets have embraced the trend by investing in a multi-channel model,” commented Kareem Tawansi, CEO of software development provider, Solentive Software.
“The Australian retail industry, on the other hand, has been a bit slower to react. This slow reaction is now being reflected in declining sales figures. If Australian retailers don’t immediately invest significantly in this space, they will continue to lose market share to overseas competitors and their major advantage – being local,” advised Tawansi.