It’s official – Aussie retailers being hammered by offshore e-tailers

In an age of information on demand it’s often difficult to determine what’s hype, what’s legit and what the security forces refer to as “chatter”.

Take the news of Michael Jackson’s death for example. Despite gigabytes of data telling us the news via blogs and tweets, it wasn’t until a traditional ‘old-media’ player, the Los Angeles Times reported it that it was taken seriously, much to the disdain of the celebrity website which actually broke the story, TMZ.

A similar thing happened (though admittedly without quite as much impact as Jacko’s demise) over the weekend. Melbourne’s Sunday Age reported what we at SmartCompany have been banging on about since we first launched.

‘Local e-tailers are losing out as shoppers embrace a world of choice’ the sub-head declared.

The ensuing page seven story then goes on to quote a Neilsen report from two years ago on the haemorrhaging of local sales to websites offshore.

This is serious

Slow or not, you can be assured that once a story hits the mainstream news, it’s big and it’s serious.

Kind of reminiscent of the dotcom bust in 2000. Warnings and rumours had circulated around the web media for months but once the crash hit the front page of the newspapers, you knew it was very serious indeed.

While this story deals with fashion retail, the trend applies to the entire retail industry.

Those Neilsen figures report that total buying by Australians from overseas websites has more than tripled in the years 2005–2008.

What was then a worrying 14% of online sales going offshore ballooned to a disastrous 43% three years later.

So nearly half of our online sales are going offshore. That’s enough to make our Treasurer and others concerned with our trade deficit squirm.

Many who adopt, succeed

In the meantime, those who do take the time to properly research online marketing techniques before opening their webstores, generally end up with excellent results.

The number of stories written about these webpreneurs is growing by the month – proving that Australia is indeed large enough to support an e-tail industry.
One downside of this trend though is that many who do succeed do not come from a retail background at all. They have seen the opportunity, done their homework, persisted and come away with successful businesses.

Thereby creating even more competition for the poor traditional retailer.

Urgent action needed

The Government’s initiative to educate smaller businesses – including retailers about doing business online – with the Small Business Online Program is an encouraging development. Hopefully it will hit the mark in bringing retailers up to speed with what’s required to operate a professional website.

As reported in this blog though, one wonders. Other initiatives (including several by this blogger) to educate this market have proven to be poorly attended.
I suspect that its going to take something far more aggressive – perhaps a dollar matching scheme like the Export Marketing Grant to entice retailers away from their counters and onto their computers.

Perhaps you have a bright idea to stimulate the sleeping giant that is Australia’s retail sector when it comes to embracing eCommerce? If so, let’s hear it below.

Our series rating eMarketing techniques for different industries returns next week.

For more Internet Secrets, click here.

Craig Reardon is a leading eBusiness educator and founder and director of independent web services firm The E Team which provide the gamut of ‘pre-built’ website solutions, technologies and services to SMEs in Melbourne and beyond.