Fifth of Australian online retailers planning physical stores

22 July 2016

Increasing numbers of Australia’s online retailers are planning to open a physical store to provide a tangible experience for customers and drive online sales, according to research.

The Commonwealth Bank's Retail Insights Report found 18% of online-only retailers are planning to establish a physical outlet in the next year, up from 13% in the previous half yearly report. This will mean that over three quarters of retail businesses will have a physical presence. 

“Bricks and mortar and multi-channel retailers are doing more online as customer preferences evolve,” said Commonwealth Bank’s national manager retail, Jerry Macey. “At the same time, emboldened digital retailers are opening physical stores to complement and drive further online sales.”

He said that with large online retailers such as Amazon opening physical stores in the US, the trend is expected to strengthen over the year ahead, with almost one in five pure play online retailers planning a bricks and mortar outlet by early 2017. 

Retailers are expecting online sales to grow at a robust 24% in the year ahead, up from 20% in the previous half. Some 35% of online sales are expected to come via mobile devices.

Over the next 12 months 45% of retailers expecting to raise investment and increase budget in an effort to capture expected sales growth. Overall, the top priorities for investment are e-commerce, loyalty programmes and social media.

Purely online retailers are significantly more optimistic about the economic future than multi-channel peers, with 46% expecting an improvement in conditions, compared to 28% among multi-channel businesses.

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