Good news and a wake-up call for Tasmanian retailers
Good news and a wake-up call for Tasmanian retailers
By Louise Grimmer
Findings from the latest Sensis e-business Report bring good news as well as a ‘wake-up call’ for Tasmanian retailers.
The good news is for those who sell online, internet sales grew from 32 per cent to 43 per cent in the last year. Local sales continue to dominate the online market, with 92 per cent of those Tasmanian businesses who sell online, selling to customers in their town or region (sales to the overseas market make up only 2 per cent of online retail sales). Clearly, there is now a significant opportunity for Tasmanian retailers to embrace the digital economy and supplement their bricks and mortar stores with online offerings. There are already a number of small independent local businesses excelling in this space, with many also offering online ordering coupled with in-store pick up. Many small businesses have also embraced social media and use it as an effective tool to attract new customers and retain loyal followers.
The ‘wake-up call’ for retailers is the relatively low number of Tasmanian businesses yet to embrace the ‘digital economy’ by offering any form of online shopping for their customers. In Tasmania only 56 per cent of retailers have a website (with even fewer stores actually sell via their site). Research currently being conducted at the University of Tasmania has found that less than half of Tasmanian retailers surveyed have any form of online presence. As I’ve previously written in The Mercury (‘Keeping up with the Shoppers’, July 2016) many retailers with a website have not optimised their site for mobile use (according to the Sensis report 43 per cent of Tasmanian retailers fall into this category), nor do they use any form of social media (Facebook, Instagram, Twitter, etc.). The majority of online customers use their mobile devices for information gathering and online purchases, so the challenge is on for retailers to step up in this area. Pleasingly many Tasmanian businesses surveyed by Sensis reported they would be improving their sites, as well as optimising them for mobile use, in the coming year.
This is an increasingly important step for small retailers given online consumption continues to grow, with over 71 per cent of Australians purchasing something online this year (up from 61 per cent in the previous year). Who is buying online and what are they purchasing? Somewhat surprisingly online sales are more popular amongst men, who primarily purchase video game and order take-away food; women tend to buy cosmetics and fashion online. Whilst male spending has almost halved ($6,500 to $3,600), female spending continues to rise, up from $2,400 to $3,100.
Two of the major findings of the Sensis report were not surprising. Airline tickets remain the most popular item purchased online, with 53 per cent of Australians (and 70 per cent of Tasmanians) purchasing online airline tickets in the past year. The strategy by airlines has been to increasingly force customers online by providing little choice in alternative purchase methods for flights. This trend is also evident in the growing number of online hotel and rental car bookings.
The Sensis report also revealed online grocery shopping is relatively flat, particularly in Tasmania where only 19 per cent of Tasmanians purchase groceries online. It is likely that online grocery shopping will be slow to take off in Tasmania. Unlike major Australian cities, Tasmania has high levels of vehicle use matched with relatively low levels of traffic congestion and plenty of parking at conveniently located supermarkets. Converting in-store grocery shoppers to online customers was always going to be difficult for the large supermarket players Coles and Woolworths. In Tasmania it is convenient and easy to shop in-store, and the early teething problems with supply chain issues no doubt turned off a number of early adopters who haven’t returned to the online platform. Whilst anecdotal evidence suggests that smaller players like Hill Street are increasing their online customers, online grocery shopping will remain a relatively underperforming market in Tasmania for the major players.
In the space between online airline tickets and internet grocery shopping, there is a real opportunity for Tasmanian retailers to open up their bricks and mortar offerings to a growing number of digital-savvy customers. For Tasmanian retailers who want to embrace the new digital economy and keep up to date with market and purchasing trends, there is help available from the State Government. A range of advisory services, information and training opportunities for retailers (and small businesses) are offered by the Department of State Growth through the Business Tasmanian online portal, including the Tasmanian Retailer Development Program, the Digital Ready Program. In addition the Enterprise Centres Tasmania Program offers advisory services to Tasmanian small business (we have 40,000 in Tasmania and 95% of them are small). Smart retailers who wish to improve their online presence and increase their skills in the ‘new way’ of retailing have benefitted from the expertise and advice offered by these programs.
For many retailers this is a challenging time, but the retail industry has historically adapted and evolved to meet customer demand and shopping trends. Now is the time for Tasmanian retailers to take advantage of the growing number of online shoppers with confidence and optimism.
Dr Louise Grimmer is a small business and retail researcher in the Institute for the Study of Social Change at the University of Tasmania.