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Australian eCommerce not all doom and gloom

Monday, March 03, 2008
This week Hitwise released new numbers on Australian browsing habits. Rather disturbingly for online retailers, visits to shopping sites accounted for only 5.93% of Australian Web visits for the week ending 9 February 2008 - almost half the number of visits compared to the US or UK. Once again it appears Australia is lagging behind the rest of the developed world when it comes to embracing the online retail concept.

Now it would be pretty easy to spend the next couple of paragraphs pointing the finger at Australia's diabolical broadband penetration and listing the endless other reasons for Australia's slow uptake of online retail. Instead I thought it might be a bit more interesting to take a look at some of the areas where Australian online retailers have experienced success to date and some of the areas that are going to lead the eCommerce charge in Australia over the coming months.

1. Niche markets
If you can find a niche and deliver something consumers can't get elsewhere you're likely to have success in online retail. If you're a start up it's even better as online retail has generally lower start up costs than ‘bricks and mortar’ enterprises- as well as access to a much wider audience. Miijo is an Australian company that has successfully done just this: nabbing a niche market for designer fashions and accessories that you can't buy anywhere domestically.

2. Global brands
Australian brands with loads of international recognition but not necessarily international distribution are also prime candidates for online retail. If it is difficult for international consumers to access your product then setting up online retail capacity to service these customers is going to ensure that their dollars go straight into your pocket. Surely this is better than their money going to bootleggers or to savvy eBay resellers. Australian denim brand Ksubi has recently worked with us to do just this - and we're currently working with another iconic Australian brand on a similar eCommerce project.

3. Big brands
A large investment in bricks and mortar doesn't mean that online retail is necessarily a waste of time. While online retail isn't likely to become your primary source of revenue any time soon, it can act to provide your customers with choice when it comes to buying your product. It can also defend your brand from competitors who might not be so shy when it comes to eCommerce. Customers already know your brand and are likely to have fewer reservations about purchasing online from your store. You needn't put your whole inventory online either - why not consider starting small or having online-only products to assess your customer’s individual requirements for online retail. With the recent launch of Sportsgirl's online store I'm certain that we'll see a number of other big Australian fashion brands follow suit in the coming months.

4. Proven successes
Certain sectors are already more successful than others when it comes to online retail. If your product is travel or music or personal electronics then it's likely that you're already one step ahead of the game. While these sectors are crowded and competition is fierce customers in these areas tend to be more used to purchasing online and are more likely do so again meaning that the market is there for a well planned and executed new competitor. I'm sure a couple of years ago Flight Centre would have laughed you out of the room if you'd told them Web Jet was going to be a major market force for domestic flights.

What I am trying to say is that Hitwise's statistics and the general gloomy impression of Australia's online shopping habits should be no cause for alarm amongst aspiring online retailers. The market is only going to grow and while it's still small there are still plenty of opportunities to be had.

Bradley Grinlinton, Senior Account Manager

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