Lords of the retailers
By Matthew Horan
December 21, 2003
An Adelaide virgin with an afro, and a sneaky animated character have increased Internet shopping by 80 per cent this Christmas.
Australian Idol winner Guy Sebastian's album, Just As I Am, and the extended-edition DVD of The Lord Of The Rings: The Two Towers (featuring the tortured, computer-generated Gollum) are the biggest-selling items at Australian online retailers.
The market share of Internet visits to online retailers has increased by 24 per cent in the past 12 months, with more than five per cent of the traffic in the past three months going to shopping websites.
The big-ticket items, along with new PlayStation games and a price drop by Microsoft on its Xbox gaming console, have helped increase online shopping, despite the effects of the interest rate rise.
Online sales are more susceptible to interest rate fluctuations because they are mostly credit card sales.
Online retailing in Australia has struggled as a result of competition from larger foreign firms, with greater range and lower prices. The rising Australian dollar has also made shopping on sites such as US website Amazon more attractive.
David Jones this year scrapped its online retailing site, leaving only a bare-bones shell to sell its popular Christmas hampers. But companies like dstore, Australia's leading online retailer, have cheerfully filled the gap.
"We're about 80 per cent up on where we were last year," said dstore chief executive Andrew Cooper. "We're quite buoyed by the Christmas trading. Our orders have increased by about 60 per cent, but people are also more ready to spend more online, so revenues are up about 80 per cent."
The average order on dstore is now around $90, with DVDs, CDs and games still the biggest sellers.
Brett Blundy, managing director of Brazin, which owns Sanity music, the 19thmost popular shopping website, said Guy Sebastian's album had helped increase all CD sales.
"Music is really firing this Christmas," he said. "Australian Idol really re-focused people on music in general. Even the Michael Jackson album is flying out of stores, despite all the controversy.
"There's also a lot more DVD players out there, so people are buying more movies."
Dstore's Mr Cooper said people were now more comfortable using the Internet for shopping. "People are finding the Internet a lot easier to use, and they're a lot more confident about the security of online payments," he said.
The growth in super-fast Broadband access has also helped, with graphics-intensive online shopping sites taking just seconds to appear on screen.
Telstra believes almost three out of every four Broadband customers use their computer to shop online.
"People have a lack of time around Christmas," Mr Cooper said. "Especially if they've got family and friends interstate, often the delivery costs are just the same anyway. We're so time-poor that if you work out the value of the hour you spend shopping, you've made back the $5 delivery."
The low overheads that result from streamlined inventory control and no showrooms allow online retailers to offer products at a discount.
A report by Internet monitors RedSherrif showed dstore was the most popular shopping site in the lead-up to Christmas, with 616,000 individual visits, each lasting an average of more than 10 minutes.
Gift retailer au.lastminute.com, ezydvd.com.au and computer retailers Harris Technology (owned by Coles Myer) and Dick Smith Electronics (owned by Woolworths) were also popular.
Altogether, Internet shopping sites reached 54 per cent of all Internet users, up from 43 per cent last year.
A report by Internet market intelligence firm Hitwise showed four per cent of all successful searches made by Australians on the Internet were for shopping sites. The report found 50.7 per cent of visitors to shopping sites were male, with almost 32 per cent aged between 25 and 34.
Almost a third of shopping site visitors come from NSW, with 27 per cent from Victoria and 17 per cent from Queensland.
Ninemsn, Australia's biggest Internet portal, said its traffic was up 25 per cent on last Christmas.
"Ninemsn has signed up an additional 12 retailers this year, which is itself a 25 per cent increase on other months of the year," said Caroline Borges, the site's executive producer of shopping. "We've now got over 25,000 products and gift ideas in our database for the Christmas period."
The Sunday Telegraph
finance.news.com.au/common/story_page/0,4057,8221226%255E462,00.html