NAB Online Retail Sales Index: Indepth report – June 2016

National Australia Bank’s latest Online Retail Sales Index (NORSI) shows online spending grew by 13.5% in the 12 months to June 2016. While still strong, growth has flattened from the year-on-year growth seen back in 2011 when the index was first established.

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Takeaway and toys continue to dominate online retail spending growth

Australian consumers spent an estimated $20.1 billion over the last year purchasing goods and services online, with strong growth in the purchase of takeaway food, toys and media.

National Australia Bank’s latest Online Retail Sales Index (NORSI) shows online spending grew by 13.5% in the 12 months to June 2016. While still strong, growth has flattened from the year-on-year growth seen back in 2011 when the index was first established.

“The $20.1 billion spent by Australians in the last year is equivalent to 6.8% of spending in the bricks and mortar’ retail sector – with growth by online businesses far outpacing these traditional retailers,” NAB Group Chief Economist Alan Oster said.

“The share of total online spending is dominated by homewares and appliances, groceries and fashion – with media contributing the most in the past year.”

“Takeaway food continues to have the fastest annual online sales growth, growing 56% in the past year. It shows the rapidly changing behaviours of consumers in the way they’re ordering takeaway as apps and new services enter the market.”

Each quarter NAB produces a ‘deep-dive’ report into the Online Retail Sales Index, breaking down online spending into measures including domestic/international performance; age; state; regional/metro performance and size of business.

“Our quarterly in-depth report helps give online retail businesses a good pulse check on the current trends in consumer spending behaviour,” NAB Group Chief Economist Alan Oster said.

Key findings include:

  • SME online retailers: A series first introduced in the March quarter, spending by small online retail sales is estimated to be 22.2% higher than compared to a year ago. Smaller online retailers – with revenue of less than $2.5 million – made up about 37% of all online retail sales in the past 12 months.
  • Domestic vs international performance: Year-on-year, domestic online sales continue to outpace international sales at 16.9% vs 0.9% respectively. Whilst there has been a slight appreciation in the Australian dollar in recent months, the dollar continued downward trend has resulted in the domestic share of spend continuing to grow. Domestic retailers were particularly buoyant in homewares and appliances, personal and recreational goods and groceries.
  • By age of consumers: Online spending remains dominated consumers aged 35 to 44, who spent mostly on groceries and liquor (20.5%) and homewares and appliances (19.2%). 18-24 year olds spent predominantly on fashion (22%) and media (19.9%).
  • By state: Spending growth shifted from WA back to the eastern states; around 76% of total online spending in the past year was made by residents from NSW, Victoria and Queensland. On a per capita basis however, residents in the ACT, NT, WA and ACT spent more than the national average.
  • Metropolitan vs regional performance: Spending growth in regional areas strengthened in June. People living in regional WA spent about 11% more than the average Australian.

For full analysis, download report:

About the NAB Online Retail Sales Index

Based on two million non-cash transactions per day, scaled up to replicate the broad economy, the NAB Online Retail Sales Index tracks online retail spending across sectors, demographics, locations and the breakdown of goods bought from domestic and international online retailers. The index is produced monthly and analysis is provided on a quarterly basis.

About Quantium

Quantium is Australia’s leading data analytics and marketing strategy firm. Quantium has worked with NAB for more than six years, assessing de-identified transaction data to derive insights, trends and shopping habits of different customer groups. The resulting analysis forms Market Blueprint and is used by NAB and other businesses to drive innovation and business performance through customer, distribution and marketing strategies.

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