Mall owner says online spending to top out at 15% of sales

Mall owner says online spending to top out at 15% of retail sales

By Hannah Lynch

May 8 (BusinessDesk) - Online spending in New Zealand and Australia will reach saturation point of 15 percent of total retail sales by 2015, according to research by AMP Capital Shopping Centres.

Online retail sales made up 5.1 percent of total retail sales in New Zealand last year, according to AMP data. That's almost identical to Australia on 5.5 percent. The UK led online purchases on 9 percent, followed by the US on 7.5 percent.

"There is still a major role for bricks and mortar - people like the social aspect of shopping and being surrounded by other people," Desiree Clark, senior marketing manager told BusinessDesk. "As retailers start to think more about their business model they will be able to put tools in place to claw back that 15 percent."

"It is about engagement, experience and adding value," she said "Customers will order and pay online but then go in store to pick up - so there is still an opportunity to upsell - we are looking for a seamless integration."

Clark said New Zealand tends to mimic Australia in terms of its shopping behaviour both online and in bricks and mortar stores.

Online shopping's projected growth in Australia and New Zealand is almost identical. Across the Tasman, AMP predicts the market will rise 13 percent over the next four years, just one percent higher than New Zealand's 12 percent.

"Those retailers not getting an online presence will be lagging further behind," Clark said. "The longer you delay the further your sales will fall."

"Some retail categories are more immune, like dry cleaners or cafes. Fashion is definitely one category that needs to adopt a multi-channel approach."

In 2011, Australia's online shopping was valued at $13.6 billion, compared with New Zealand's $2.7 billion.

Clark said retailers need to remember that online shopping is not targeted towards one particular age group.

"Younger shoppers are the ones you want to develop a loyalty for but don't dismiss the over 45 to 50 group - it's a high growth area for that age group," she said. "How they have taken to Facebook shows baby boomers are adopting new technology"

(BusinessDesk)

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