Online retail is gaining some real momentum in Australia, to the point where businesses that don’t sell online now risk losing significant market share to those that do. More than that, engaging in online retail offers retailers all kinds of customer insights that can also be used for marketing in the offline world.

When a hole appears in the range of online retail available to Australians, we’ve frequently seen offshore retailers stepping in to fill the void. Reports suggest that up to half of online sales in Australia are going to offshore retailers. A recent survey of online retailers in the USA also found that Australia is the third biggest market for online sales, and many of these retailers had not even optimised their site for overseas markets. There are a number of reasons why Australian dollars are heading overseas like this, but in recent times we’ve seen more Australian businesses enter the online retail arena to stem the flow.

Authentics Australia and Converse are good examples of a distributor successfully embracing the online market for their products in Australia. These sites provide consumers with access to product descriptions and various product images to research the right products for them, and the provision of wish list functionality allows customers to window shop before committing to purchase.

In December 2008, 33% of all traffic to bricks and mortar online stores came from search engines. With online research the predominant source of product information, not capturing customer’s attention with your online retail presence will result in lost customers.  The majority of online research and purchases take place outside of usual shopping hours, so capturing customers during this time will provide your business with a 24-hour shopfront where customers can feel comfortable conducting research before they buy.

It’s therefore somewhat baffling that online retail is still seen by many retailers as a nice add-on rather than a retail industry necessity; in many respects online retail delivers the perfect transaction for both buyers and sellers. Theoretically, fewer overheads for sellers should deliver increased profit margins from lower retail prices. But what’s also increasingly useful for retailers is the customer information that can be gleaned from selling online, and how that can be used to enhance customer experiences and increase sales.

Even a relatively simple suite of analytics tools can provide demographic data about customers, their shopping behaviour and their product preferences providing opportunities for cross selling and up-selling. This information can then be used to build CRM and marketing campaigns that are tailored to the specific interests and demands of each customer. Not only that, this information is very useful when fed into offline marketing campaigns, resulting in a more informed and targeted use of precious marketing dollars.

An online retailing presence also opens up the world of social media, with customers able to interact with a business, and each other, in fun and mutually beneficial ways.  Facilitating the conversation between customers through social media integration allows them to obtain feedback from their friends and provides a facility for them to provide recommendations to their friends and create a virtual group shopping experience.