Despite being “late to the party”, Australian retailers are finally embracing the market opportunities presented by online shopping. Author: Chris Taylor
Despite being “late to the party”, Australian retailers are finally embracing the market opportunities presented by online shopping.
According to news.com.au, tens of millions worth of Australian dollars are now being flung into myriad digital platforms, products and services.
Mid-market department store Target is the latest to undergo a complete business overhaul. It is sinking in some A$30 – A$40 million restructuring the business to include thousands of new product lines, new lower prices for deliveries and new website functionality.
Target is projecting 21 per cent month-on-month sales growth for 2012, keeping its online credit card processing systems working overtime for the rest of the year.
The investment comes after Myer, Australia’s largest department store group, announced its intentions to drive its digital business.
Myer has forked out a massive capital expenditure of A$70 – A$80 million on online retail in total and it appears that this gamble has paid off. Channelnews.com.au reports that online sales have surged 200 per cent since it made the investment, according to the company’s third quarter results, posted last week.
While Commonwealth Bank senior retail analyst Andrew McLennan says that the big stores have missed out somewhat by being so “late to the party”, he very much doubts that they’ll have any trouble squeezing out their smaller competitors.
“These guys have massive buying power, scale of distribution and massive advertising budgets and when they start to reallocate that to things like Google ads they absolutely swamp the little guys,” he said.