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Aussies spend up big with local online stores, despite GST

Adam Turner (via SMH) | June 6, 2013
More than half of Australians shop online, but we're spending most of that money locally.

Generic sale, retail, women shopping pic.

More than half of Australians shop online, but we're spending most of that money locally.

Some Australian bricks and mortar retailers like to cry foul over the fact that online shoppers are avoiding the GST when shopping overseas. Retail giants claim it's hurting them badly, but the truth is that most of our online spending is actually with Australian retailers. 

More than 50% of Australians shopped online in the last three months, according to the latest Ray Morgan research. That might sound like doom and gloom for traditional retailers, but the latest NAB Online Retail Sales Index reveals that 72% of our online spending in April was actually with Australian online stores. They're businesses that are considered Australian for tax purposes, so they should be charging GST. That 72% figure isn't a blip, it's remained fairly steady over the last 12 months.

If the GST was really such a deal-breaker, wouldn't we be taking advantage of the strong Aussie dollar and cheap shipping to spend up big overseas? The fact we're spending most of our online dollars locally means that traditional retailers might need to look a bit closer to home for the reasons why we're less likely to shop over the counter.

The overheads of running a physical store mean that retailers will always struggle to beat online stores on price alone. Instead they need to play to their strengths. Improving customer service would certainly be a step in the right direction, an area where many retail giants have slipped as they've cut costs.

At this point retailers will start complaining about "showroomers", who come in for advice and then buy online elsewhere. It's true that improved customer service might bring in a few more showroomers, but it's also likely to convert more window shoppers into paying customers. Good customer service can also creates customer loyalty -- people who value good service will keep coming back (and tell their friends) even though they can save a few dollars shopping online. 

Where do you spend your online dollars? What would it take to get you off your computer and back down to the shops?


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