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Good times ahead for online footwear

 

shoes, fashion, high heelsOnline shoe sales in Australia have flourished over the past five years, despite the difficult retail conditions that have plagued traditional bricks and mortar stores, according to IbisWorld.

The online retail space offers an unparalleled and diverse range of shoes at competitive prices, providing consumers with greater choice, flexibility and convenience, without geographical boundaries. Industry revenue is forecast to grow by an annualised 17.4 per cent over the five years through 2014-15, to reach $445.4 million.

As consumers take advantage of the convenience of shopping from home, revenue is expected to grow by 11.3 per cent in 2014-15.

The industry is expected to grow strongly over the next five years, but at a slower pace than the previous period.

Consumer sentiment plummeted following the global financial crisis and ensuing instability in financial markets prompted many households to scale back expenditure on non-essential items by postponing purchases or opting for cheaper alternatives.

IbisWorld industry analyst, Lauren Magner, says online footwear stores have benefited from consumers seeking choice and value when it comes to discretionary purchases.

Although consumers have been typically hesitant to purchase footwear online, due to the difficulty of determining size and fit, this has changed as an increasing number of industry players have started to offer free shipping and free returns.

The rollout of the National Broadband Network is expected to deliver faster and more secure internet connections, particularly to regional areas, expanding the industry’s potential client base.

“Online footwear retailers will attempt to boost sales by developing mobile optimised websites for smartphones and tablets, providing consumers with the ability to shop when they want, where they want,” says Magner.

The line between bricks and mortar stores and online retailers will become increasingly blurred as more hybrid business models, such as Shoes of Prey and Sneakerboy, enter the market.

The online shoe sales industry has a low level of market share concentration. No company has been able to establish a dominant market presence in the industry, as industry players often stock comparable brands and similar products.

Larger players such as The Iconic and SurfStitch have sustained considerable growth over the past five years, aided by increased acceptance of online shopping coupled with a focus on customer service levels.

Intensifying efforts by traditional retailers such as David Jones and Myer to improve their online presence are projected to increase competition and potentially translate to rising market concentration, if they are able to compete with pure-play retailers that typically have a lower operational cost base.

For more information, visit IbisWorld’s Online Shoe Sales report.

 

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