Household goods retailing fell slightly, by 0.2% in September 2018, according to ABS figures recently released. Furniture sales, however, were unchanged. Department store sales fell by 0.1% in the same month. In earlier data for the 12 months to April 2018, retail sales grew by some 2.6%. These figures reflect the stagnation in household income due to sustained low wage growth in this country, according to economists. Online retailing is where the big growth figures are happening, with Macquarie Bank according them around 60% of total sales growth in the last year.
Online Retail Shows Big Growth
Their stats distinguish pure play online retailers, who sell from their own website, from multi-channel online retailers. The arrival of Amazon, in a big way, to our shoes, will increase this trend, according to these industry watchers. Online is going to continue to grow in leaps and bounds, whilst bricks and mortar retailers will struggle with small growth and their overpriced commercial rents in the coastal cities of Australia. The truth of the matter is that land and buildings are way too expensive in this country to sustain our businesses. They cannot be competitive when they are paying outrageous rents in Sydney and Melbourne, especially.
Home Furnishings Best Served by a Mix of Retail & Online
Home furnishings: Retail still reigns here because people still like to have a tactile encounter with these kinds of purchases. They are big ticket items and they will live with them for a reasonably long time. Click here for a great example of a quality Australian made furniture retailer in Sydney. However, bricks and mortar retailers in the home furnishings sector are liable to large rents because of the floor space they require to show their wares to the public. Online retailers will move into this sector, more fully, in the near future, because this is a clearly defined trend, which shows no sign of halting. Bricks and mortar retailers must expand their own online sales if they are to survive in the medium to long term.
Department Stores Reinventing Themselves s Online Retailers
Department stores like David Jones and Myer have been attempting to transform themselves into successful online retailers for a number of years now. Their online sales increased by some 21% in the year to January. There are multiple factors promoting online retailing, not the least being the cost and hassle of getting out and about in large cities like Sydney and Melbourne. Petrol prices and parking costs are high. Traffic is a major issue. More people are going to stay home and shop online for the sheer ease of it. Online retailing is not going away anytime soon, it is here to stay.