Myer, David Jones among top 20 Australian online retailers | Crikey

A decade after shutting down its original digital strategy, David Jones has come back with a vengeance. The retailer, along with department store rival Myer, has spent tens of millions of dollars in buffing up its online presence. Woolworths and Wesfarmers have started giving regular updates on online sales in their financial updates. Chains like Speciality Retail and Country Road are reporting sales increases, or actual revenue figures from digital sources

Even though Harvey Norman boss Gerry Harvey still decries the use of the internet, Harvey Norman is turning over several million dollars a year in online sales. That?s not forgetting pure play online retailers like electronics retailer Kogan, Shoes of Prey, or Appliances Online. These companies, like StyleTread, are not only making a huge stamp on the retail consumer space, but they?re demonstrating retail is able to attract serious venture capital money.

As Telsyte senior research manager Sam Yip says, it?s been a ?very big year of change?. ?There have been players early in the space that have dropped out, and a lot of bricks-and-mortar retailers are doing more.?We?re not hearing any more Gerry Harvey stories; everyone acknowledges that this is the channel to be operating in,? he said.

The debate over the GST threshold has largely disappeared, although the industry at large is still hopeful of some government relief. At the very least, most have accepted a 10% change in price isn?t going to help much of anyone. The smarter retailers are simply getting on with the job.

If there?s any evidence the online retail revolution is taking hold, look no further than Australia Post?s reaction. It is investing more money in parcel lockers and out-of-hours delivery services to cater for the huge number of parcels being delivered. So much so, the majority of its revenue is now being made from these types of parcel deliveries. Experts believe online retail in Australia has tipped over the top of the hill, so to speak. The hard work is being done already. Now, Yip argues, the next challenge is to transition that success to platforms like mobile.

The other big challenge here is around delivery. ?In the past year we?ve seen horror stories of where logistics have gone wrong, with people getting wrong orders all the time,? Yip said. ?There?s a need to really refine that back-end logistics functionality.?

We?ve created a list based on a mixture of different metrics, including traffic data from Experian, revenue, and any sort of noteworthy achievement. Local divisions of global companies, such as Apple and Amazon, are excluded, along with auction sites such as eBay and Gumtree So in no particular order ?

1. Kogan

If not the most popular, Kogan is one of the best-known homegrown online retailers in Australia. Mostly thanks to founder and CEO Ruslan Kogan?s insistence on putting himself and his business in the news through quirky???and sometimes weird???comments and campaigns. More recently the?Internet Explorer tax?got a mention in several international news outlets.?It?s difficult not to be impressed by Kogan?s reach. After shipping a single container of televisions five years ago, Kogan has transformed into a $250 million business with more on the way.?Spars with Gerry Harvey aside, Kogan has maintained a solid footing, with Ruslan saying he?s ?happy to be everybody?s first choice for a second television?. With a view to growing into a billion-dollar business, and expansion into services like mobile, Kogan will be around for a while yet.

2. Milan Direct

The other half of Ruslan Kogan?s online empire, Milan Direct, was initially an odd proposition. Selling furniture online back in 2007 wasn?t done very much in Australia, if at all. But Dean Ramler and Kogan have managed to turn the business into a $12 million powerhouse.?The company?s success has spawned some eager competitors. But with growth of 100% last year and international expansion ahead, Milan Direct seems set to hold on to its strong market position for a while.

3. Catch of the Day

Perhaps the largest online retail success story in Australia, Catch of the Day continues to grow from strength to strength. After starting as an eBay business, Gabby and Hezi Leibovich have managed to transform the company into a $350 million powerhouse, complete with funding from one James Packer.?Part of the success of the Catch Group can be attributed to its savvy expansion plans. Rather than start a business for every category, the team has been able to pick up start-ups and nurture success from there. After expanding into grocery and wine, it seems natural the business could continue to thrive???and all signs are pointing to an eventual float.

4. Booktopia

Given books are one of the cheapest things to buy from offshore retailers, it?s surprising any local online store has managed to create a thriving business. But Tony Nash at Booktopia has been able to do just that, on track to turn over $28 million in 2012-13.?There isn?t much complicated strategy here. A focus on clean design, good customer service management and an ever-present need to reduce shipping times has kept Booktopia at the top.

5. JB Hi-Fi

One of the larger businesses in Australia to actually understand how online retailing works; JB Hi-Fi is making a good name for itself online. With more than $37 million in digital revenue in the first half of the year alone, at 2% of total sales, the company is proving itself as a good example for dedicated bricks-and-mortar stores heading online.?In fact, JB Hi-Fi perhaps encapsulates what retailers need to be doing online. With the ability to check stock, ?click and collect? and some pretty fast customer service, chief executive Terry Smart seems to be doing a good job in transforming the iconic business into a powerhouse online.

6. Officeworks

Office supplies are a boring topic, but Officeworks has at least managed to make the buying process as easy as it can. After all, office supplies are something you should be able to buy online instead of heading to a store.?The company won?t confirm how much revenue the business makes online, although reports indicate it could be anywhere up to $150 million, equivalent to 13-14% of revenue. That?s an astonishing figure for an office supplies store, but it does make sense???the company understands how people shop online. ?Just like JB Hi-Fi, Officeworks shows it understands how to not only get people browsing on a site, but makes sure it knows how to capture their money.

7. Specialty Fashion

Although the retail and fashion industries obviously haven?t been having the best time, Speciality Fashion has been working on its digital presence???and it?s doing very well.?The company, which operates the Millers, Katies and Crossroads brands, recorded $11.3 million in online revenue during the first half of the year, representing 3.6% of total value. It isn?t the biggest online retailer around, but the fact the company has been so successful with its digital push???and is willing to disclose just how much money it makes online???is a good step in the right direction.

8. Big W

While the company doesn?t divulge how much of its revenue is made online, the popularity of Big W?s site indicates it could be making quite a lot of cash. In any case, Woolworths is giving DealsDirect a run for its money with the Big W online store, which doesn?t have many frills but is focused on simplicity of use and cheaper prices.

9. BrandsExclusive

BrandsExclusive has been at the forefront of the private shopping club scene in Australia. The business, which has mostly focused on fashion, quickly found a loyal user base and has been growing ever since.?Perhaps the company?s biggest success has been its ability to leverage demand for private shopping networks into cash. Even last year APN News & Media announced a massive $36 million stake.?The business was aiming to turn over $70 million last year.

10. The Iconic

The Iconic certainly isn?t divulging much with regard to revenue, but it seems outrageous to leave the company off a list detailing the most important online retailers in Australia.?The business has made a huge splash in Australia with its bright marketing tactics, but it?s also gained a reputation for securing not only one $25 million funding round, but a second earlier this year.?The Iconic certainly has enough money to make a dent on the online retail market. It remains to be seen whether that success will continue.

*For the full list read the rest of this article at SmartCompany

Source: http://www.crikey.com.au/2013/03/28/whos-cashing-in-online-the-top-20-australian-retailers/

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