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Wesfarmers boosts sales, but online still a challenge for retailers

Retailers should make it easier for shoppers to buy in-store and online say experts. AAP

Retailing giant Wesfarmers says it is encouraged by growth in online sales at its Officeworks and Target stores, after the brands posted small lifts in total sales during the last quarter.

But retailing experts say more needs to be done before Australian retailers can successfully take advantage of the multi-channel retail opportunity.

Growth at Wesfarmers continued to be led by its Coles brand, which posted higher than expected sales growth of 5.2% during the December quarter.

The Target brand managed growth of just 0.6% when compared against the previous corresponding period, while for Officeworks it was 0.3% for the same period, which included the Christmas shopping season so critical to annual sales growth.

“Officeworks continued to see solid growth in online sales,” said Officeworks managing director Richard Goyder.

“However sales overall were flat due to ongoing deflation in technology and related categories and continued challenging conditions for small to medium sized business customers.”

John Gillam, managing director of home improvement and office supplies said the group was progressing well with its “every channel” offer to customers.

“Providing a broad range of customers with a compelling in-store offer while continuing to invest in the online channel remain key priorities for the team,” Mr Gillam said.

But Jason Pallant, research fellow at the Australian Centre for Retail Studies at Monash University, said consumers that shopped online expected a far greater in-store experience than what was currently being delivered in Australia.

Recent research from Monash found shoppers value the ability to return items bought online in-store, the ability to check stock levels online, and consistent sale prices across all retail channels.

Mr Pallant said the idea of “omni-channel” retailing meant customers should be able to buy something on the spot, whether they be shopping online or in a store running low on stock.

“Just because I’ve chosen to go to a particular store and that doesn’t have the stock doesn’t mean I should walk out without you selling me something.”

Mr Pallant said retailers in other markets were increasingly offering kiosks so that customers could still purchase an item even if it was out of stock in the store they visited.

“It’s not a simple thing, it’s actually quite complicated to know where your stock is at every point.

"Shoppers don’t realise that and frankly they don’t care,” Mr Pallant said.

Wesfarmers’ improved optimism about online sales comes as several major retailers continue their push for a tax on online purchases made with offshore retailers.

The Federal Government has committed to lowering the current $1000 GST threshold by the end of the year.

Scott Ewing, senior research fellow at Swinburne University’s Institute for Social Research, said it was clear Australians were shopping online for more than the 10% saving delivered by tax exemptions.

“For the large part it’s not going to have a huge impact,” Ewing said.

He said in a perfect tax system online retail should be attracting the same tax regime as bricks and mortar, but the strong bricks and mortar retailer focus on the situation was only helping to further push shoppers online.

“It reinforces the idea that they’re resistant to the online world and I don’t think that’s sending a good message to investors or consumers.”

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