Online shopping remains local while group buying declines

Online retailers who fear losing sales to international companies may have one less thing to worry about, with a new Telstra survey revealing nearly 70 per cent of online shopping occurs with local businesses.

The survey indicated just under 90 per cent of people made both online and in-store purchases, with more than one-third buying from the same bricks-and-mortar retailer. Surprisingly, men and those aged 30-49 made the most online purchases, with women and 20-29 year olds spending 10 per cent and nine per cent less respectively. The average spend per person was just over $2200 and the most popular items were clothing and accessories.

Telstra's retail industry executive, Gareth Jude, said that more and more consumers were using multiple mediums - including the web and mobile apps - to buy products.

"What customers really want is not either the physical store or online - the want a blended experience where they can go home for hours online and then come to the store, try things on, go back online and have things delivered to their office," Mr Jude said.

A separate survey by media buying group MagnaGlobal also underscored these findings and revealed that 12 per cent of Australian consumers shopped weekly at local websites, compared with seven per cent of those shopping at international sites. The survey also noted that nearly 40 per cent of people believed it was "wrong" to ask a shop assistant to show them an item and then purchase it online.

Online shopping equated to $11.7 billion in the 12 months to July, up 24 per cent, according to a new National Australia Bank survey. But while online shopping is proving to be a key driver of business sales, a specific subset - online group buying - is on the decline.

Group buying, whereby a product or service is offered at a significantly discounted price if there are enough buyers, had its heyday in 2011 when the industry raked in $487 million in revenue. The September quarter alone recorded a turnover of $158.5 million, up 28 per cent on the previous quarter.

This is according to research firm Telsyte, which found that online group spending fell five per cent to $117 million in the June quarter 2012, the third consecutive drop since its peak in September last year.

Catch of the Day's CEO Paul Reining said that fewer sales could be attributed to a reduction of market players, as group buying activity switched to discounted daily deals rather than getting enough people to buy a specific deal.

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