Retailers warned not to overlook online

Retail businesses without an online offering could “begin to fade and become less relevant to Australian consumers” in the coming years, an industry group has claimed.

The Australian Interactive Media Industry Association said that expenditure on online advertising will increase in 2011, with 83% of retailers increasing online ad budgets as a proportion of overall marketing budgets.

The group, which represents Australia’s digital advertising industry, warned that start-up retailers that failed to embrace the digital world would be left behind.

“It’s an emerging fact that Australians are becoming conditioned to believing if you want the best deal you really need to go online – at least to look for the best deal – if not buy it online,” says Robert Wong, chairman of AIMIA’s retail industry group.

“The ‘you’ll find the best deal online’ movement has been enhanced by travel sites such as Wotif.com and more recently the emergence of online buying clubs like Buyinvite.com.au.”

“The basic proposition of these businesses is known brands at incredible prices – and this is starting to eat away major store retail margins as they now have to battle with market perceptions that you “pay more if you buy in-store”.

“I predict that most retailers in Australia will be forced to have an online sales offering in the coming three years. But even if they don’t they will need to have a strong online advertising presence to ensure their messages about offers and deals are put up against the emerging clearance houses and discount coupon businesses to maintain market share.”

“If traditional store retailers don’t have their best offers online consumers will simply forget to consider them.”

“It will be interesting to see over the next few years if some of our traditional retail business who don’t become active in the online space begin to fade and become less relevant to the Australian consumer.”