Online retailers stand up to US counterparts

Posted: August 5, 2010 in Online Marketing
Tags: ,

Though small, Australia’s online retail market is experiencing rapid growth and achieving better conversion rates than their US counterparts, a new study from Forrester Research has revealed.

The company’s report, Online Retailing in Australia 2010: Performance and Channels, the second in a series of three reports about the local online retail market, has shown that despite the Australian market being less developed than the US, retailers are benefitting from lower levels of competition and customer expectation. Whereas Australian online businesses had an average conversion rate of 5.1%, the US average was just 3.4%. US-based companies also has a higher “cart abandonment” rate and returned goods rate of 51% and 7% respectively, compared to Australia’s 27.3% and 3%. The average order value in Australia of US$244 was also slightly higher than the US$208 in the US.

The survey, which involved 334 Australian online retail professionals, also showed that those retailers who were only online, compared to those with a real-world presence, expected to reap larger financial rewards this year. A total of 35% pure-play online retailers anticipated an increase in annual retail sales of more than 50%, compared to 4% of those with a real store. A further 24% of pure-play online retailers said they expect sales to lift by 26% to 50% this year, compared with 13% of those with real stores.

Australian online retailers are so far not benefitting from international sales, with just 12% earning more than 10% of their total revenue from global sales, despite 59% shipping overseas.

The report noted that the absence of mail-order catalogue selling in Australia, which is big in the US, as well as a skills shortage in “direct-response selling” is holding back the e-tail sector locally.

Source – Digital Media

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