Finance Consumer Online shopping sale season is coming – and it could be the end for physical retail
Updated:

Online shopping sale season is coming – and it could be the end for physical retail

Share
Twitter Facebook Reddit Pinterest Email

Australians are spending more money online than ever before, a spend that’s only going to increase as Christmas approaches and sales season blooms.

As online sellers look set to pounce and capture the sales, it could be the thing that finally knocks over bricks-and-mortar retailers.

Amazon Prime Day was announced this week – running for 48 hours from October 12 – and Black Friday (November 27) will be here before we know it.

They arrive just in time for consumers to snap up expensive looking but cheap ticketed festive gifts from the comfort of their homes.

Data released from Finder this week shows how embedded online shopping has become in our daily habits: The average Aussie is spending 5.3 hours a week online shopping, at a cost of $188.

To buy or not to buy?

So will these big online sales days, which have crashed websites in the past, make the same sort of splash for consumer interest?

It depends on what they’re selling, and what you’re buying, Deakin University marketing lecturer Michael Callaghan said.

Australians have adjusted to buying a lot of their necessities online – sometimes in bulk if it’s a good price and we know we’ll use it eventually, Dr Callaghan explained.

Discretionary shopping is where retailers have to work to win our dollars, especially as government payments decrease and the September cliff passes.

And what better discretionary shopping than for Christmas gifts?

This is where Black Friday, the US import, made its mark: Retailers got the chance to clear out end-of-season stock, and shoppers got to buy a gift for someone they could know better, for a fraction of what it looks like it’s worth.

Black Friday has spread out of the internet and into the real world, but things might be very different this year, thanks to COVID-19. Photo: Getty

The tradition has caught on in Australia.

“There’s a range of things that will happen in the Prime sale and the Black Friday sales: They will be things that they found sitting out back that they want to move fairly quickly,” Dr Callaghan explained.

“With Amazon sales, the prices are really around 50 per cent off because they are just trying to clear out their stock.”

But what about Australian retailers?

University of Tasmania senior marketing lecturer Louise Grimmer said it appeared Amazon had positioned itself well in this pre-Christmas buying period, pushing back its Prime Day from July.

Dr Grimmer does, however, have reservations that it will hold the same draw for shoppers: Online sales are no longer the unique event we might have once regarded them as.

“I’m not sure that the lure or excitement of online shopping days is as potent as it once was and that’s because we are all shopping now online anyway,” Dr Grimmer said.

There’s also the possibility, Dr Grimmer said, that Australians will put their dollars into the local economy, choosing to spend with home-grown retailers rather than international ecommerce giants.

“This is certainly something that Amazon is aware of as they are highlighting a ‘shop local’ section on the website,” she added.

This could go the other way.

With less money to spend, and a COVID-induced reluctance to brave busy shopping centres, Australians might be more inclined to get more for less online, Dr Callaghan countered.

“Bricks-and-mortar retail was already in massive trouble before Christmas last year. And then COVID hit,” he said.

In January this year almost 200 stores were pegged to close in the coming months (this was before COVID really arrived). By June this year, shopping centre vacancies were at a 20-year high.

“These crazy online sales will continue, and in my mind, that’s what will turn bricks-and-mortar into dinosaurs,” Dr Callaghan predicted.