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e-tailers in the window seat

e-tailers in the window seat

Australian e-tailers have a great opportunity to capitalise on the sinking dollar as shoppers seek cheaper wares than those being proffered by overseas behemoths, say a number of industry pundits.

According to Peter Crowe, commerce producer at Yahoo Australia & NZ, people once had reason to turn overseas for their online shopping needs, given that the range of products and services on offer usually exceeded what was available locally. These days, however, local e-tailers have come to the party, and are providing a competitive service to their overseas counterparts.

"In the early days, shopping Web sites in America were just that little bit more advanced than here. The local market didn't have an offering, so people were really forced to go overseas," he said.

"These days, the choice is not such a big deal, and very clearly pricing is in favour of local retailers. You pay more to shop overseas. Plus there's a lot of great Australian retailers that sell online and have good customer service and fast delivery."

Crowe believes, however, that some online shoppers are stuck in something of a time warp, and continually return to the trusty old Amazons of the world because that's where they've always gone, oblivious to the increase in standards of local e-tailers.

The downturn of the Aussie dollar will put the squeeze on shoppers using overseas sites, however. With the exchange rate affecting both the price and the delivery charge overseas, it is delivering a powerful blow to the hip pocket. Crowe believes that this will force online shoppers to look for other alternatives closer to home.

"The currency thing will make people evaluate price and we've always seen, particularly in the online shopping area, that price is one of the good motivators for an online purchase," he said.

Dr Adir Shiffman, founding director of Global Reviews, agrees that Aussie shoppers will be forced to consider local options in their online shopping activities in the face of high product and freight costs associated with buying from overseas vendors.

"The real potential is in the area of postage," he said. "Amazon's charges, for example, when ordering four CDs by regular mail is $US7.80. At 65 US cents for an Australian dollar, that equated to $12, whereas at 45 cents to the dollar it's $17.33. Shipping of the same 4 CDs from Chaos Music costs $5.50. This is a difference of almost $12.

"Assuming an Australian dollar value of 50 US cents, ordering four top-40 CDs from Amazon costs A$127.52, while from Chaos it costs $85.30. On top of that, Chaos will deliver within five days and Amazon within 14-96 days," he added.

Shiffman also cited anecdotal feedback that he had received from consumers over the past three weeks, claiming that shopping for items on US sites is no longer cheaper. Assuming that these shoppers are enjoying the online experience, they will simply choose another site on which to buy and hence it is most likely to be a local operator, Shiffman said.

Not only will Australian sites be attractive to local shoppers, but Crowe believes that now is the prime time for e-tailers to capitalise on the climate and to focus on exporting.

"Exports as a result of the currency evaluation can be great news for many retailers," he said. "Obviously an Internet business is already a global business. Often they need to do nothing more than market this to potential customer bases."

An increased awareness of what local e-tailers have to offer and a larger customer base will mean that many online retailers will be able to continue to invest in their business and deliver even better solutions to customers, according to Crowe.


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