The share of online sales processed on a mobile device is growing faster than retailers expected, according to the latest research from the Commonwealth Bank.
The research shows that sales through mobile devices have risen from 18 per cent of all online sales to 29 per cent in the past year — an average annual growth rate of 60 per cent. According to CommBank, 12 months ago retailers had anticipated mobile sales to increase 36 per cent.
According to NAB online retail sales index, Australian consumers have spent around $21.08 billion over the 12 months to October 2016. This is equivalent to seven per cent of spending at traditional bricks and mortar retailers.
The figures reinforce the need for marketers and retailers to get their mobile strategies in order in attempt to catch up with consumer behaviour.
Booktopia CEO, Tony Nash, said mobile browsing, traffic and indeed sales are the rise for his pureplay online business. “We’ve put a lot of emphasis on and expertise towards making sure our customer experience on a mobile platform is really good,” Nash said.
“Interestingly, we find the size of the consumer basket is always a little bit more for a desktop or tablet sale, because there’s only so much screen to work with on mobile. It tends to limit the ability to browse the site somewhat.”
CommBank said this growth is supporting the expansion of smaller pureplay online retailers, with the number of businesses generating between $1 million and $10 million in annual turnover increasing by 133 per cent over the last 12 months. The proportion of online-only retailers generating in excess of $10 million remains consistent at 20 per cent, with a smaller majority still generating less than $1 million (52 per cent).
“The online retail industry in Australia is no longer limited to the larger dominant players. Smaller retailers continue to carve out market share,” said Jerry Macey, National Manager Retail, Commonwealth Bank.
“Smaller online retail businesses are quickly achieving greater scale, with almost half now turning over more than a million dollars, and one in five generating revenue in excess of ten million. They are bringing greater focus to targeting customers, and optimising existing channels rather than seeking to introduce new avenues to market.”
Pureplay retailers have a rosier outlook. Forty-six per cent of them had a positive view on business conditions over the next 12 months — up from 38 per cent a year ago — whereas 26 per cent of purely bricks and mortar businesses had a positive outlook for the coming year. Thirty-three per cent of multi-channel retailers — those with stores and online channels — were optimistic about the future.
“Competition remains strong as larger multi-channel competitors also enhance their online presence. Although the weaker dollar has made purchasing from overseas retailers a little less appealing in recent times, the competitive threat remains,” Macey said.
The CommBank Retail Insights report takes an indepth look into retailers’ pricing strategies. The research suggests consumers strongly dislike being asked to pay different prices on different channels, with 72 per cent agreeing it is important for retailers to set prices consistently. One quarter of retailers surveyed said they had difficulty controlling prices across channels and 23 per cent said they had trouble co-ordinating with different parts of their business.