New research commissioned by PayPal shows business growth increased by an average of 5% in the last year for those who sell online, while those who don’t sell online saw business decline.
The study, conducted by Roy Morgan, shows that in the last year, business growth increased by an average of 5% for those have sold online for at least 12 months.
However, business fell by 4% for those who don’t sell online or haven’t sold online for at least a year.
Additionally, 17% of the online businesses increased staff, compared with only 13% who were not online for at least a year.
According to the preliminary results, only one out of three businesses has been online since July last year, despite the fact Australian online retail has grown to be a $31.7 billion market.
Russell Zimmerman, executive director of the Australian Retailers Association, says the results confirm the transition to online retail has been a “significant challenge” for local businesses.
“However, we know retailers here must keep pace with changing global market trends as future growth in the sector will unequivocally come from digital channels,” Zimmerman says.
Zimmerman made mention of PayPal Australia initiative Driving Business Online, which is essentially an education campaign for Australian businesses.
Last year, the DBO campaign visited 14 regional towns in NSW, providing businesses with tips and tools to grow their business online from a team of eCommerce experts.
Now in its second year, the campaign is expanding its reach with eight workshop seminars across seven states and territories, a series of webinars and an educational website.
Jeff Clementz, managing director of PayPal Australia, says local retailers are “an important fixture” in Australia’s communities, but they must engage and embrace technology.
Similarly, Zimmerman says establishing an internet presence is a “critical first step” for any business to take, which is why it is partnering with DBO for a second year.
“[The internet] at the very least provides a significant opportunity to supplement [your] business with an additional sales and marketing channel,” he says.
The news comes on the back of the NAB Online Retail Sales Index for June, which shows Australia’s total online spending was around $11.5 billion in the year ended June 2012.
According to NAB, this level is equivalent to 5.3% of traditional bricks and mortar retail spending – excluding cafés, restaurants and takeaway food – for the year ended May 2012.
In June 2012, the online retail sales index rose to 189 points – up marginally from 187 points in May 2012.
In dollar terms, online spending grew by around 19% year-on-year in June. This represents a significant strengthening compared with previous two months (14% in May and 15% in April).
However, the growth rate for online retail sales remains considerably lower than the levels from a year earlier (32% year-on-year in June 2011).