omputer nerds, but has instead become an integral part of the retail landscape. Despite its common place standing though, in Australia at least, e-commerce is still in its infancy. We’re at a point where most retailers have some sort of online presence, and those who do not are soon to have one. But there’s still plenty to be learned. E-commerce is more than meets the eye. It’s more than paying for a domain name and uploading a picture of product. There’s warehousing and logistics to consider, SEO, usability and interface, shipping, mobile commerce, omni-channel, and click and collect just as a starting point. In 2014, Inside Retail Magazine has selected the Australian retail sites we believe are doing it best. Of course, benchmarking of such a rapidly evolving sector is never easy, and with so many facets coming together, it is difficult to know how to weigh each of these. So instead, we’ve used our retail knowledge and background, with some influence from site traffic and profitability, and site features and benefits to compile this list. As in 2013 in our inaugural list, it does not include supermarkets. The list This year’s list reflects the pace of change in the Australian e-commerce market today.While there are plenty of retailers to feature in both the 2013 and 2014 lists, there has been a great deal of movement in the ranks. Our number one for 2014 is Dan Murphy’s, which takes the crown from its stablemate, Big W, who was ranked first in 2013. Dan Murphy’s has spent significant capital in the past two years to create a website that is supreme in usability, delivery, popularity, and omni-channel experience. Catch of the Day has snuck up the listing from eight in 2013 to number two. This is primarily as result of its sophisticated business model which means it has limited inventory to carry, as well as the fact that it is among the most profitable Australian sites at present, at a time when even some of the biggest and most lauded players continue to bleed cash. Big W slides in at number three. The best of the discount department store online offerings (or any department store for that matter), Big W continues to excel due to its high traffic levels and customer offerings, such as online layby, click and collect, and an extensive range. What would an e-commerce list be without Kogan? Founder, Ruslan Kogan, continues to push the envelope with innovation in the online sector, and is almost a household name, despite never having opened a physical store. You’ll note that out of our top five e-commerce retailers, three of the five run extensive bricks and mortar store networks. In 2014, the importance of a physical presence is more crucial than ever, however, in a category such as electronics where Kogan plays, the need for a store is significantly less. In at number five is the first apparel brand on the list – Cotton On. The Cotton On site has grown its database by leaps and bounds since its late launch in 2011, but the ease of use and integration of all six of its brands on the one platform, as well as the traffic it is receiving provide its high placing. Appliances Online has taken the number six spot.The site is incredibly intuitive, clean, and easy to use. In fact, it may have ranked higher if it had stronger branding among the general public, with most shoppers heading to bricks and mortar brands such as Harvey Norman or The Good Guys before checking out this online gem. OzSale has retained its seventh placing on the Inside Retail Magazine Top 25 E-commerce Sites list.The private sale club has gone from strength to strength and now boasts the largest database and the biggest number of brand sales, surpassing rivals in the small Australian market. Fashion brand, Sportsgirl, has fallen this year from three to eight. Sportsgirl was a pioneer and market leader in young women’s fashion online, but a recent site redevelopment has done little to excite the punters. Milan Direct, the online furniture merchant, is another of Ruslan Kogan’s babies, and comes in at number nine. It has taken great steps forward in a category other Australian brands have traditionally shied away from in e-commerce. EziBuy is a dark horse and new entry to Inside Retail Magazine’s Top 25 E-commerce Sites at number 10. Founded in 1978 in New Zealand as a catalogue business selling apparel, the business has largely flown under the radar, and continues to do so, despite being snapped up by Woolworths in August last year. Ezibuy, like Catch of the Day, has a strong model, and future viability that is now only bolstered by the firepower of its new parent. Especially of note in this list, is that start up fashion retailer, The Iconic, has taken a tumble from its prior position at number two. This year it lands at number 16, as a result of staff cuts, the departure of key management, and speculation that the brand is not only yet to turn a profit, but is in fact still losing large amounts of cash. Although denied by the company, several capital injections have been made over the past 12 months has done little to stem the flow of criticism. Deals Direct, which came in at number four in 2013 is this year ranked 11th. The brand has spent the last 12 months exiting unprofitable side businesses in apparel and supermarket categories, and hasn’t reported a profit in recent times. The online department store’s recent listing on the Australian Stock Exchange will be interesting to watch in 2014, with the cash raised expected to be used to acquire fellow e-commerce business.   Internationals Internationally, our top 10 has also had some shuffles. This year we’ve included non-english retail powerhouses in the mix, which has come at the expense of some of the western online darlings. It is simply impossible to overlook Chinese site, Taobao, just on its sheer size. China’s most popular shopping website by far, to the western eye the page is an unsophisticated mangle of text and images, but the Chinese love it – in fact, the more cluttered the site, the better for attracting the Asian market. Make a website too clean and they think you have nothing to sell. Taobao’s dominance has seen Amazon come in at second place. Amazon’s scale, global reach, and continued innovation (think delivery drones) remains bounds ahead of its e-comm rivals. EBay has squeezed in at number three as the world’s top auction site, while Asos is at four. Despite slower growth in the last few months, the UK fashion brand is still crushing its competition, and doesn’t look like halting that reign anytime soon. UK department store, John Lewis, is of course, the world’s most successful department store brand online, deriving continual growth of its total sales from the channel. In the fine weeks to Christmas 2013 e-commerce sales comprised 31.8 percent of total sales, up 22.6 percent of total Sales, up 22.6 percent on the previous year. Still killing it in the book category is The Book Depository, now owned by Amazon.The brand’s growth and diversity hasn’t been hampered by Amazon’s ownership and the site continues to steal marketshare from envious, higher priced book retailers the world over. Japanese marketplace, Rakuten, makes its debut on our international list, once again for its enormous traffic and popularity in its home market, as well as its international expansion. Rounding out the internationals at eight, nine and 10 respectively is Etsy, Tmall, and Walmart. Etsy is now a global brand and continues to capture customers for crafters around the world to prey on with their wares, however, the longevity of this concept is questionable in the longer term. Tmall is an another Chinese site, and despite being the second most popular shopping site in China, itdeserves a place on the list as a result of its scale and home market popularity. And of course, Walmart, the world’s biggest retailer, cannot be overlooked, even when it comes to online. The brand has big plans for the e-commerce channel over the next few years, and while already a booming business for the bricks and mortar operator, it is likely to dominate cyber space in the same fashion as it has physically in the not too distant future. What’s ahead? So just what can we expect 2014 to look like when it comes to online retail? Retail digital expert, Justus Wilde, principle strategist at Amblique, says there are three things an Australian retailer should be focusing on this year. First and foremost, he believes stock optimisation and having a single view of inventory will be top priority. “What I mean by that is retailers enabling themselves to fulfil from not just a centralised warehouse, but store locations,” explains Wilde. “If you look at the UK and the most recent Christmas figures, some retailers are reporting 70 per cent click and collect. “It’s integral and there are very few retailers in Australia that have the systems to really give them a single view of inventory across their entire business and be able to provide true click and collect. “There’s a few Australians doing click and collect, but a lot of people are still shipping click and collect orders from their warehouse to the store and providing pick up that way.” Another aspect retailers should set their sights on is greater personalistion. “Understanding customer shopping behaviour and taking that to the next level is important,” Wilde advises. “I think a lot of big retailers have focused on getting the basics right in the last few years, and as that is getting better, the status quo is getting higher. “Retailers can now focus on making the offer really relevant. I’m surprised a lot of big retailers still send the same messages and offers to everyone.” Other aspects worthy of consideration are speed of delivery and integration of endless aisle principles. “We did some benchmarking recently on time to ship for various retailers. One shipped on average in .8 of a day, and the other took 1.2 days to ship.The repeat purchase rate of the ones with the shorter time to ship was so much higher, and we looked at about four or five examples and there was always a correlation.” This facet also comes down to inventory and having accurate information on stock in order to get the product to the customer quickly and build loyalty. In terms of the endless aisle, Wilde references a personal experience as an example. “I was in San Francisco and went to a Coach store to buy a cricket bag. They only had it in black, but I wanted brown. “So the guy showed me the bag, explained it all, said they didn’t have the bag in stock and none of the surrounding stores did either, but it was available on their website. “If I went to my hotel and bought it online it would cost $30 for next day delivery, or, he said if put my order in with him then, he wouldn’t charge delivery and I would have the bag by the next morning. “He had a tablet, put in the details, and the next day I had the bag. The guy in the store still got his commission from the sale, I got my bag, and Coach didn’t lose me as a customer.” Wilde says this level of service, known as the endless aisle, is a huge opportunity that many Australian retailers are missing out on. “If you take the approach that you go into the city store, but the Parramatta store has the dress in the size you want, if the salesperson could order that quickly through an iPad and have it delivered to you, it’s a much stronger experience than doing an interstore transfer. “A lot of stores today don’t push the website because the store staff are commissioned and web sales don’t contribute,” says Wilde. Ones to watch Inside Retail Magazine asked Wilde for his top three up and coming Australian websites to watch in 2014. His picks are below: Temple & Webster Temple & Webster uses beautiful photography, while curating desirable brands. The site is easy to use with great information, and features its own blog and gift cards. It fosters a sense of urgency in its promotions by flagging out of stocks, and teasers for up and coming events, while friends who recommend friends receive rewards. Michael Hill This site has fantastic product imagery, and is embarking on global expansion. Michael Hill is a great example of a business with its eye on overseas markets and should be an inspiration to all. Sneaking Duck A well set out, easy to navigate site with answers always at hand. The try at home option is fabulous and allows users to share online for a second opinion. This is the way of the future and makes buying glasses simple. This article first appeared in Inside Retail Magazine’s February/March 2014 issue.