NAB online retail index slows

NAB’s April online retail index for April is out and shows slowing growth:

According to the Index, the value of online sales in Australia for the year to April 2012 was $11.1 billion. However, our research shows a clear slowdown in growth over the past year, with year-on-year growth rates declining to 15.5% in April. The Household goods and Electronics sector was the key driver of this slowdown, with growth rates turning negative in April, at -5%. This sector clearly diverges from other categories, which were stable at or above 20% year-on-year. Weakening in domestic demand and consumer behaviour regarding recent tablet sales may have contributed to this trend. Overall, growth rates for online retail still outstrip traditional retail growth, demonstrating a gradual but steady shift in buying behaviour. Western Australia is driving online growth, with the 30s, 40s and 50s age groups driving an exceptionally strong 32% year-on-year online growth level.

Full report below.

NAB Online Retail Index – Indepth Report April 2012 FINAL

Houses and Holes
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  1. I find that surprising given the favourable AUD-USD exchange rate we’ve had in recent times.

    It looks like Australians are happy to keep sleep-walking into bricks-and-mortar stores to pay prices that are multiples of what people pay in the US.

    Australians have always been reluctant and late adopters of technology but why they are happy to 2x or 3x the US price is beyond me. Almost anything you want to buy (except perishables) can be sourced reliably and cheaply from the US.

    • Lots of people I know have different reasons for going into bricks and mortar stores…

      1) They want it now
      2) They want to see/feel/touch/try the clothes or item
      3) They don’t trust online
      4) They don’t think about the costs like an economist…(otherwise no one would ever have any credit card debt or pay interest etc etc)

  2. To some extent, online shopping could be viewed as a recreational activity, and therefore spending on this ‘entertainment’ might be viewed as optional. This would especially be the case if online shopping is mostly used for non-core purchases rather than being regarded as a mainstream source of supply.

    Let’s not forget the illiteracy and innumeracy of half the population, which maybe lead them to interpret any drop in the AUD.USD as making online shopping pointless.

    • I shop online because I can see what I’m buying, buy it and get it delivered without having to drive anywhere.

      Additionally, online shopping to me is a function to perform as needed. eg boss says “get that expensive $600 Makita hammer drill now, we need it. OH, and get the best price too.”
      So I shop on-line.

      I do not think that this type of shopping is reserved for the nuf-nufs of the world.

      As for the 1/2 population with sub standard numeracy and literacy, in my view we have mainly the Murdoch Press to thank for that. They push anti-science at every chance they get, pedddle the most inane crap to their so called readership and promote deep conservative views that include explicit reductions in mass education.
      So we get what the Murdoch wants.

      • JunkyardMEMBER

        I have a strong opinion on your post, I’m just waiting for the Herald Sun to come out in the morning to tell me what that opinion will be.

  3. Shipping costs often makes up the difference though. I tried buying trainers online about 6 months ago and after postage the difference was only may $5 or $10.

    Given I was not certain of the correct sizing, I am often different sizes in different brands and even amongst the same brand, but different styles, I was willing to pay the extra for certainty of size.

    I also found if I waited for the sales, I could get a pair at the same price or below the US$ price.

    I’d be very reluctant to buy any clothes online unless I can try them on first in a bricks and mortar store and be certain of the fit. I’m happy to wait for sales

    • You are either looking at the wrong websites or have found a bloody cheap shop if you can only get 5-10 bucks difference. If you’re talking runners when you say trainers, try for a substantial difference, and you can get even better deals in the US.

    • I recently bought 2 pairs of runners from Amazon US for less than $60 each delivered.

      However, it did take me a while (30mins~) to find them, as not all of them can be delivered to AU, or with a reasonable postage cost. But it was well worth it.

      • Maybe you wear the same shoes I do. Mine were $60 delivered from Amazon versus $150 in Australia. So I bought two pairs and saved a total of $180.

        Even though the AUD has come off a bit lately it’s still a great time to take advantage of our high Australian wages to buy cheap imported goods. High wages and cheap goods — it’s the best of both worlds.

  4. George Locust

    I dont kill trees any more.
    Stopped buying paper books about 18 months ago when i got my Kindle DX. 1) cheaper 2) immediate delivery via wireless whispernet 3) Saves me filling scarce living space with books/bookshelves.

    btw did u know that paper book publishers in Australia are “protected” by special legislation from more efficient foreign publishers? Meaning the poor old Aussie consumer gets shafted again.

    • Yes this was highlighted frequently in the press, last year i think. I read it in the much maligned murdoch press.

  5. David Stockman…

    Lesson for Australia?

    “Q: Why are you so down on the U.S. economy?

    A: It’s become super-saturated with debt.

    Typically the private and public sectors would borrow $1.50 or $1.60 each year for every $1 of GDP growth. That was the golden constant. It had been at that ratio for 100 years save for some minor squiggles during the bottom of the Depression. By the time we got to the mid-’90s, we were borrowing $3 for every $1 of GDP growth. And by the time we got to the peak in 2006 or 2007, we were actually taking on $6 of new debt to grind out $1 of new GDP.

    People were taking $25,000, $50,000 out of their home for the fourth refinancing. That’s what was keeping the economy going, creating jobs in restaurants, creating jobs in retail, creating jobs as gardeners, creating jobs as Pilates instructors that were not supportable with organic earnings and income.”

    That bit “creating jobs in retail”