Price is a key factor for people to shop online overseas, but it is not the only one.
Australian National Retailers Association (ANRA) CEO, Margy Osmond, made the observation during IBM’s Smarter Consumer event in Sydney, who acknowledged that price is driving local consumers overseas.
“With overseas websites not paying GST, that has a significant impact in terms of retailers here in Australia,” she said.
ANRA has calculated that at this point in time there is $997 million that could be going to state governments in GST revenue.
“If you want to talk about a level playing field in Australia in terms of retailers, that needs to be changed,” Osmond said.
She added most international suppliers of goods view Australia as something as a “cash cow.”
“We have a good economy and they figure that we pay more, so they charge more to local retailers for goods than they charge overseas,” Osmond said.
Beyond GST, Osmond said there were a “whole range of issues” that stack up against local retailers, some of which can be affected by government.
For one, there is parallel book importation laws, which Osmond said has been recommended to be removed several times, not the least by the Productivity Commission.
For that reason, Osmond said price is not the only reason people shop online.
“The issue for Australian retailers is levelling the playing field as much as we possibly can and then putting efforts into the other issues,” she said.
The customer’s choice
From consumer point of view, The Retail Doctor Group strategic branding and consumer insights director, Katharina Kuehn, said we are moving closer to a “perfect market situation.”
While consumers have always had choice, she said now it is “really global, transparent and in real time.”
“If a shopper sees a store in US stock a product for $700 and for $300 in the UK, why would they pay this premium any longer when they have this accessibility and transparency?” Kuehn asked.
The challenge she sees for retailers is keeping a customer as they move from the shopfront to the brand experience.
“It is about having a strong point of differentiation and not competing on price, but competing on experience,” she said.
Patrick Budmar covers consumer and enterprise technology breaking news for IDG Communications. Follow Patrick on Twitter at @patrick_budmar.