NAB’S Online Retail Sales Index monthly update shows that growth of the sector has eased in March, while still steaming far ahead of the flagging sales figures in traditional retail.
The National Australia Bank has released its March update for the Online Retail Sales Index, highlighting a reduced rate of growth compared to February. In saying that, March’s online sales growth was still up by 19 percent year-on-year.
- For the 12 months ending March 2012, Australia’s total online spending was around $11 billion. This is equivalent to 5.1% of traditional bricks-and-mortar retail spending (excluding hospitality).
- In dollar terms, online spending grew by around 19 per cent year on year in March 2012. This rate of growth is considerably lower than the level in March 2011 (39%), it remains around trend levels for the last six months.
- Of course, online sales growth remains much stronger than traditional retail bricks-and-mortar retail – which recorded year-on-year growth of 5.1% in February, however this could be related to the additional day in the month, due to 2012 being a leap year (we saw a similar spike in growth rates in February for online sales). After seasonal adjustment, bricks-and-mortar slowed a little – with a growth of 1.6% (vs. 2.2% in January).
- NAB observed an interesting spike in the latest data at a sub-sector level – and in particular electronics sales. This was likely related to the growth of tablet sales, with March coinciding with the release of various new products, including Apple’s new iPad.
NAB’s findings seem to indicate that the growth of online retail is not progressing as quickly as it has in the past, while far surpassing the growth of traditional retail. Eventually, it could be expected that the two will eventually level out as retailers find the perfect ‘blend’ of various retail channels.
Interestingly, the spike in electronics sales and potentially in tablet devices will have a compound effect of continuing to sustain online retail growth as more shoppers make purchases via their mobile and tablet units.
Is it only a matter of time before online retail growth slows to that of bricks-and-mortar?