Electronic goods, toys, sporting goods and clothes were at the top of consumers’ shopping lists last Christmas, according to PayPal, with 70% of items purchased from Australian retailers.

According to PayPal, last Christmas “truly marked the end” of the battle between online and offline retailers, with many capitalising on their investment in eCommerce over the last year.

But Elena Wise, acting managing director for PayPal Australia, says the ongoing strength of the Australian dollar will see international competition intensify in 2012.

However, Wise is confident domestic retailers are up to the challenge, providing they innovate.

“Emerging retail models being offered by Aussie retailers, such as ‘buy online, collect in-store’, provide a customer-centric approach that... is hard matched by overseas competition,” Wise says.

“Australian consumers are nimble, and are increasingly switching between various retail channels to research, locate, and buy goods and services.”

“Consumers first and foremost demand convenient ways to purchase, be it online, via a mobile device or in-store.”

“Retailers that deliver great products and customer service across multiple channels are ultimately those that will reap the rewards of the new retail environment.”

This year, PayPal predicts local retailers will attempt to improve product delivery to customers via Australia Post, and look at ways to get their customers through checkouts faster.

The news comes on the back of a report by KPMG, based on a study of 9,600 consumers from 31 countries, including 300 Australian consumers.

Across every category of goods, the majority of respondents prefer to purchase items online rather than at a physical outlet, according to the report.

“Almost 70% of consumers told us that they were most likely to buy flights and vacations online, and 65% said the same about physical CDs, DVDs, books and video games,” the report said.

The in-store customer experience is also changing, with more than a third of the consumers surveyed using mobile devices to store, access and redeem coupons for in-store purchases.

“More than one in five scanned a product barcode or quick response code to obtain more information about the specific product or campaign,” the report said.

“So while display ads and flyers are still an important part of the retail promotional mix, mobile innovations are also rapidly capturing the imagination – and attention – of consumers.”

“Retailers are also investing more in location-based marketing, so that coupons can be sent to a consumer’s mobile device when they are in the proximity of the retailer’s store.”