Etailing -- Not all it's cracked up to be

In fact, the study suggested only a limited number of etailers will successfully capture an online audience. By 2010, online shopping is expected to make up only 5.3 per cent of Australia's total retail market.

According to the study "Internet retailing in Australia: Market outlook, implications and impacts", Australian consumers spent $280 million on online shopping in 1999, including $75 million on travel sales. This equates to 0.15 per cent of Australia's total retail market for 1999.

"In Australia this is still a small niche market," said Simon Rumbold, director, Jebb Holland Dimasi. "At the moment there are a number of products that are cheaper online and that people want to buy online . . . there are also many categories (where products) are not cheaper and will never be cheaper. Groceries and food will always be outweighed in the traditional markets."

Jebb Holland Dimasi, in conjunction with Marketshare, released the multi-client survey, which involved 1700 consumer interviews.

According to Rumbold, the internet will only be an effective shop-front for a limited number of retailers in specific areas. He added that stores with both an off and online presence are more likely to succeed. Multichannel retailing is "the future online model for many products," he stated.

Computer, software and music sales are estimated to contribute 20-30 per cent of the total online spend, travel and books will make up 10 per cent, cosmetics and appliances will contribute around 3 per cent and groceries and fruit and vegetable will be less than 3 per cent, the study suggested.

Close to two-thirds of the retailing market will not attract online consumers, Rumbold said. "Online has potential; some products will be a success. But the remainder has far more limited potential. Groceries have very limited potential. As yet we have not seen the evidence that costs can be reduced."

While many online stores do not incur large rental bills, often an internet company has high start-up, marketing, distribution and delivery costs. Rumbold said these costs could amount to between 20 and 35 per cent of an online retailer's total operating costs, compared with only 4 per cent for traditional retailers.

Total operating costs of traditional retailers are around 28 per cent, but for an online retailer, total operating costs could be as high as 40 per cent.

"Amazon.com is not making a profit because of the marketing and distribution costs they have been incurring," Rumbold said.

Join the newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.
Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Luisa Bustos

PC World
Show Comments

Father’s Day Gift Guide

Brand Post

Most Popular Reviews

Latest Articles

Resources

PCW Evaluation Team

Luke Hill

MSI GT75 TITAN

I need power and lots of it. As a Front End Web developer anything less just won’t cut it which is why the MSI GT75 is an outstanding laptop for me. It’s a sleek and futuristic looking, high quality, beast that has a touch of sci-fi flare about it.

Emily Tyson

MSI GE63 Raider

If you’re looking to invest in your next work horse laptop for work or home use, you can’t go wrong with the MSI GE63.

Laura Johnston

MSI GS65 Stealth Thin

If you can afford the price tag, it is well worth the money. It out performs any other laptop I have tried for gaming, and the transportable design and incredible display also make it ideal for work.

Andrew Teoh

Brother MFC-L9570CDW Multifunction Printer

Touch screen visibility and operation was great and easy to navigate. Each menu and sub-menu was in an understandable order and category

Louise Coady

Brother MFC-L9570CDW Multifunction Printer

The printer was convenient, produced clear and vibrant images and was very easy to use

Edwina Hargreaves

WD My Cloud Home

I would recommend this device for families and small businesses who want one safe place to store all their important digital content and a way to easily share it with friends, family, business partners, or customers.

Featured Content

Product Launch Showcase

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?