Shoppers research online before buying, says survey
Written on the 25th of December 2008 by Craig Johnstone
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QUEENSLAND shoppers are flocking to the internet – not to buy products online but to research what they want before travelling to "bricks-and-mortar" shops to pick up bargains.
The trend is causing some experts to predict that retailers may have to rethink their sales strategies, investing in quality sales staff and customer service rather than a state-of-the-art internet presence.
Australian Centre for Retail Studies research analyst Alana Jones said up to 50 per cent of consumers did some online research before shopping "in store".
"So it's not too gloom and doom for the high street shop that does not have a large online presence or facility to sell online," she said.
This change in online behaviour has been targeted by market analysts looking at how best to tap into an emerging but rapidly developing market.
While research shows that more people use catalogues to look for products and then buy them online, the more rapidly growing trend is for people to browse online and then travel to a store to buy the product.
The trend has been picked up by companies such as Westfield, which introduced searchable gift catalogues online, broken down by shopping centre, that list items from a few dollars to over $7000.
However, online trading, with its capacity for heavy discounting through offers such as reduced shipping costs, is likely to continue to do well during an economic downturn.
Most online sites in Australia cut their shipping costs substantially in the lead-up to Christmas.
A survey last month by Woolcott Research for internet provider AAPT suggests that working families with young children are taking to the virtual checkout with gusto.
This demographic is emerging as a market to rival the technology-literate young singles who are the traditional online consumers.
There are rough estimates that online retailing will grow by about 5 per cent annually over the next five years.
Market segments likely to experience good growth will be travel products such as airfares and accommodation, as well as books, DVDs and consumer electronics.
Ms Jones said fashion would remain a product where online trading was unlikely to dominate because it was a "high involvement" product.
"There has been conjecture that the growth of online will mean the end of big box retailers," she said. "But with Australian retailers like, say, Harvey Norman, there is still that consumer need for a high involvement in the sale."
In other words, consumers still want to look closely at a prospective purchase before they commit to buying it.
Ms Jones said that because customers were doing extensive research online, sales staff needed to be well-informed about products.
One area where Australian consumers have proven to behave differently to shoppers in other countries is in grocery purchases online.
Reports from Britain suggest groceries will overtake electrical goods as the prime item to be sold online within five years.
But a recent survey by Deloitte suggested that only 5 per cent of Australians would be prepared to buy groceries online, the second least popular category after furniture and homewares.