Aust online stores a rip-off - report
A survey of 300 Australian businesses with an online sales presence found only 24 per cent offered free delivery. Picture: Thinkstock
AUSTRALIAN retailers are being accused of using the online shopping boom to rip-off customers with excessive shipping costs.
A report by global information firm Experian Marketing Services, Retail in Australia: It's Time to Embrace the Digital Future, surveyed 300 Australian retailers in sectors including automotive, sports, groceries, health and beauty, office supplies and fashion.
It reveals that, for businesses providing an online sales presence, only 24 per cent offered free delivery.
And with shipping prices averaging $ 25 to $ 30, Matt Glasner, General Manager for Experian Marketing Services and retail sector consultant, believes they are ''making a margin on delivery''.
Australian customers aren't taking it and instead spend their money at international offerings such as Next, a UK-based retailer offering free shipping to Australia.
National Retail Association executive director Trevor Evans denied domestic players were unfairly gouging consumers.
Mr Evans said local operators were burdened with higher costs, while foreigners escaped GST and other charges for goods less than $ 1000, making it easier for them to offer free or discount shipping.
''It is an institutionalised price advantage and imbalance in the tax regime that allows overseas competitors to exploit the market,'' Mr Evans said.
''Australian retailers are competing with one arm tied around their back while just a click away a foreign retailer doesn't have to pay GST nor does the consumer pay duty.''
Data shows Australia is a massive market for online retailers.
In August alone, Australian visits to e-commerce websites totalled more that 500 million.
With an estimated internet population of 19 million, Australians are averaging 26 visits a month on online shopping.
Yet one third of Australia's top visited e-commerce website sites remain internationally based, with US-based Amazon and UK-based ASOS leading the grab for the Australian dollar.
The potential online profits for Australian businesses are huge.
In 2010 it was estimated that Australians spent $ 27 billion online.
Forecasts predict that this will grow by 37 percent to $ 37.1 billion in 2013.
According to Glasner, retailers still have the opportunity to tap this wealth if the online experience is made more fulfilling for customers.
''The Iconic is a great example of how to interact with a website. It gives close to 360 degree views of products, free delivery or an option to have purchases delivered within three hours, and you can order three sizes and send two back.''
And many major retailers are increasing their investment in online platforms and experiencing rapid sales growth.
Australian Retailers Association chief Russell Zimmerman said some local merchants were caught short by the recent explosion in online shopping amid the surging Aussie dollar.
But he said many, such as Sportscraft, Bras N Things and Cotton On, had responded exceptionally well.
With Christmas just around the corner, we will soon find out if Australian retailers have done enough to prevent Australian money heading offshore yet again.
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