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In pictures: Australia’s five key online spending trends

Thursday, 29 November 2012 | By Oliver Milman

feature-tech-trend-thumbIf you’re selling your products online this Christmas, you should be gearing yourself up for boom time – research out this week shows that eCommerce sales will peak between December 7 and 10 this year.

 

However, even if your business is a seasonal one, you shouldn’t be thinking about online sales once a year. Much like pets, your website should be for life.

 

Figures released by NAB show that retail spending via the internet grew 26% to hit $12.3 billion in the year ending October 2012 – a period, let’s not forget, that has seen sluggish spending in bricks-and-mortar stores, prompting repeated warnings of retail apocalypse from whitegoods kingpin Gerry Harvey.

 

In some ways, the growth in the overall online sales figure undersells the importance of having a website. For start-ups, having an online presence – something that nearly a half of small businesses still lack – is an invaluable marketing tool, as well as a potential sales fulfilment channel.

 

We recently outlined the five key trends shaping online marketing in Australia. Now we’re digging into the sales figures to uncover Aussie online retail habits – who is spending, where, and on what.

 

Here are the five key online sales trends shaping Australia – click on each of the tabs below to see each of NAB’s illustrative graphs and charts:

 

 

1. Online growth has fired up again after a lull

 

Earlier this year, growth in online sales appeared to plateau. But it is on the rise again – 26% in the year to October compared to just 12% in the year to May.

 

It still has a long way to go to catch up with traditional retail – $12.3 billion versus $221 billion means that eCommerce has are share of just 5.6%.

 

But it’s clear that online sales, perhaps fuelled by interest rate cuts or increased public awareness of the savings available to them, are growing quickly again, while traditional retail remains relatively stagnant.

 

 

 

Growth in online sales vs. retail sales (%, yoy)

1

Source: NAB

 

 

1aa

Source: NAB

 

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2. Domestic retailers are outpunching their international rivals

NAB says there was a surge in purchases from international websites in late 2010 but, since then, we’ve seen an encouraging fight back from Australian retailers.

 

With the big retailers finally getting their act together and deciding – about a decade too late – that this internet thing isn’t just a passing fad, nearly three quarters of all Aussie consumer dollars went to domestic sites.

 

 

 

Growth in online sales by retail location (%, yoy)

2

Source: NAB

 

 

2a

Source: NAB

 

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3. Older online shoppers are dominating

 

While it’s true that people aged 40 and younger take up the lion’s share of online spending, it’s the older end of this spectrum that is driving the growth.

 

Following an initial growth spurt by people aged under 30 last year, younger online shoppers have since been caught up and, indeed, eclipsed by those aged 30 to 50.

 

In terms of per capita spending, it’s no contest – your customers are most likely to be aged in their 30s or 40s.

 

 

 

Share of spending by age group (year to October 2012)

3a

Source: NAB

 

 

Growth of spending by age group (%, yoy)

3b

Source: NAB

 

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4. WA’s mining wealth is being (in part) transferred online

 

Geographically, growth in online sales is strongest in the ACT, Northern Territory and Western Australia.

The latter two are streets ahead of the pack, with 36% growth in the year to October, although three states – NSW, Victoria and Queensland – still account for 76% of total online spending.

 

The WA online surge appears to be fuelled by its more high-profile boom – the mining industry. NAB points out that growth rates for under-30s in WA are far less pronounced compared to the rest of the country, suggesting that it’s older people, with more of the mining benefits, who are driving the growth.

 

 

 

Share of spending by state (year to October 2012)

4a

Source: NAB

 

 

Growth of spending by state (%, yoy)

4b

Source: NAB

 

 

Average annual growth rate by age group (% yoy)

4c

Source: NAB

 

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5. We are consistent in our spending choices

 

When it comes to what Australians spend money on, we are a fairly consistent bunch.

 

NAB splits the categories up thus: sector one – online auctions, department stores, fashion, cosmetics and variety stores; sector two – home, furniture, appliances and electronics; sector three – recreation, toys, games and hobbies, music, movies and books; and sector four – groceries, liquor and specialised food.

 

Growth rates for all of these categories have been consistent, apart from household goods and electronics. Demographically, those aged under 30 have a larger than average spending in categories one and three, with older people more likely to buy groceries and alcohol online.

 

 

 

Online index by category

5a

Source: NAB

 

 

Online index growth by category (%, yoy)

5b

Source: NAB