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Grocery and liquor leads online shopping, opportunity for independents

Online and click-and-collect ordering of food and liquor is gaining strong momentum with the big two supermarkets increasing sales and ramping up infrastructure, putting pressure on SME retailers to introduce online shopping or improve the online experience for customers.

However, independent grocery wholesaler and IGA marketer Metcash announced the rollout of its Metcash One digital marketing service, which will be launched to independent grocers in the next three months.

According to the NAB Online Retail Sales Index, Australia’s online retail spending continues to increase following a period of more subdued growth, now valued at around $15.6 billion for the year to July 2014.

“This represents annual growth of 8.6%, placing online at around 6.6% of traditional retail spending. The share of domestic spending also continues to edge higher, now capturing around 75% of total online spending,” NAB said.

Despite a recent pick-up in the traditional bricks & mortar retail sector, it was still outpaced by the improvement in online retail growth over the past quarter.

Sales growth in Groceries & Liquor was strongest, up 15.9% for the year, followed by Department & Variety Stores. Online spending remains dominated by 35-44 year olds, but its uptake by older Australians has been encouraging.

Coles (10% total market share) and Woolworths (9%) hold strong shares of the online shopping market.

Woolworths, which recently launched its first ‘dark’ store at Mascot, Sydney, said in August that online grocery shopping made internet shopping its fastest growing market with $2.45 billion profit in 2013-14.

A Sensis e-Business report found that around 85% of Australia’s SME enterprises are selling goods online, with 45% of this group mainly selling online to local customers, while 54% sell goods outside of their home towns and into other states.

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