Rise of the online retailer

over the past two years, particularly with companies like Dealdirect.com.au and OO.com.au appearing in mainstream media like Today Tonight, A Current Affair and BRW. There are also subsidiaries of these companies advertising on morning TV infomercials – the ones that promote those fantastic super-duper vacuum cleaners and never-to-miss offers.

In the past these infomercials have sold only over the phone; this has changed now where they are only selling online.

Brendan Tully, owner of IT retailer Nintek.com.au, says these are just a few media forums where online retailers are popping up and this is generating attention from markets that would not necessarily think about shopping online, such as the mum and dad-style shopper that has no interest in electronics or buying music online but can certainly see the benefit in purchasing furniture or pet food online.

“I think consumers are now seeing real benefits and savings to shopping online, not just fiscal savings but time savings and just the pure convenience of it. I think the booming Australian economy has also seen a lot of professionals become even more time poor, with online retail a solution for their time constraints,” Tully says.

PlusCorp’s Fernandes says the reputation of online stores can be helped via medium forums as well as through government endorsements. PlusCorp is a ‘Federal Government Endorsed Supplier’, as well as a ‘QLD GITC Supplier’.

“We partner directly with Intel, AMD, Microsoft and other vendors. Having these associations gives us a heads-up against online retailers who are notorious for bad service. Also customers can find out if an online retailer is legitimate through forums such as www.whirlpool.net.au or www.overclockers.com.au,” Fernandes says.

Competition tightens

In the past few years it has certainly become much simpler and quicker to set up an online shop than setting up a physical shop. However, it is like any business – just having a shop front or a website is far from enough.

First of all, marketing is a major challenge. No-one will browse your website just because you have one. It is like all business, you must have a thorough understanding of the total business, including the technology, logistics, consumer behaviours, finance and so on.

Nintek’s Tully says the face of online retail has changed over the years and it has become a lot more competitive with a lot more players in the market.
“I think this has a lot to do with lower costs to entry, more so now than ever. There’s a lot more off-the-shelf shop front packages that look very professional and polished that take very little time to put together,” he says.

“Around two to three years ago, there was a lot less choice in software and back then you’d still need a graphics guy to polish the site to make it look professional. That said, a lot of packages still look very much like they were made on an assembly line with very little style, user features or unique feel to them – if you’ve visited one you’ve visited them all.”

Tully believes the industry would be hard pressed to find a site that was generating $10 million in revenue per year that wasn’t running on a custom-built system. Marketing online is very cheap, unlike

of online retailer rise software the