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E-Tailing: A Snapshot of Australia's Top 25 Retailers

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Chapter 13
E-Tailing:
A Snapshot of Australia’s Top 25 Retailers

Ritesh Chugh
CQUniversity Melbourne, Australia

Srimannarayana Grandhi
CQUniversity Melbourne, Australia

ABSTRACT
E-tailing is gaining momentum in Australia as traditional retailers are moving towards the adoption
of a clicks and bricks strategy. Electronic retailing or E-tailing can be described as selling goods to
customers directly through electronic means. Although this Business-to-Consumer phenomenon is not
new, it is helping retailers to conduct business online with virtual storefronts and to reach local and
global customers who are disadvantaged by geographical and other distinct barriers. This chapter starts
by detailing the current state of e-tailing with supporting statistical figures from recent research with a
specific emphasis on Australia. Overall growth in Internet accessibility rates across Australia clearly
demonstrate e-tailing’s importance to online customers. Literature review once again proves the fact that
Internet not only creates opportunities for retailers but also poses many challenges. Further discussion
provides an understanding of the suitability of the retailing channel for different products and services.
This study then analyses the usability of Australia’s top twenty-five retailers’ websites focussing on
website usability factors, such as navigation, searchability, purchasing, layout and clarity, information
content, and web browser compatibility. Australia’s e-tailing initiatives might be lagging behind most
developed markets, however recent research indicates that there is a significant growth in this online
activity and it will continue to attract more and more online customers in the coming years as retailers
jump on the e-tailing bandwagon.

DOI: 10.4018/978-1-4666-1619-6.ch013

INTRODUCTION
The shift from buying in brick and mortar stores
to online stores is transforming the retailing ex-
perience, both for the buyer and the seller. The
Internet has provided a forum for connectivity,
allowing buyers and sellers to connect with each
other on a global platform. E-commerce has been
the emerging winner, fuelled by the explosion of
Internet usage worldwide. Retailers, worldwide,
have been quick to embrace electronic retailing
(e-tailing) which has allowed them to capture new
markets and gain competitive advantage. E-tailing
offers economy of scale for retailers in the form
of reduced supply chain costs and an enhanced
market share. Customers can potentially benefit
from an increased variety of products and services
with varied information, convenience, price com-
petition and a different shopping experience for
customers who may like this medium owing to its
“so-called” anonymity (Turban et al, 2000; Wang,
Head & Archer, 2000). Progressively more busi-
nesses are recognising the commercial potential
of the Internet and a number of researchers have
noted that the Internet is becoming important to
facilitate business in the networked world (Burt
& Sparks, 2003; Sharma & Sheth, 2004). The
benefits of setting up an Internet presence are cost
reduction, new capability, competitive advantage,
communications improvement, improved control
and customer service (Bocij et al., 2006). As
online retailing continues to grow, it has become
important to identify quality factors that impact on
it. There are various measures of the dimensions
of quality for making online retailing successful.
Cho and Park (2002) have identified ten important
factors of electronic commerce user-consumer
satisfaction: quality of product information, level
of consumer services, satisfaction with purchase
results and delivery; goodness of site design,
satisfaction with purchasing process, quality of
product merchandising and portfolio, satisfaction
with delivery time and charge, convenience of
payment methods, ease of use, and provision of
298
E-Tailing
additional information services. The focus on site
design is crucial in providing customers a friendly
navigational experience and enhance satisfaction.
Schneider (2009) suggests that in terms of
dollar value and number of transactions, business-
to-business (B2B) electronic commerce is much
greater than business-to-consumer (B2C) elec-
tronic commerce whereas the business processes
that support selling and purchasing activities is
greater than the number of all B2B and B2C
transactions together. This demonstrates the
importance of electronic commerce in support-
ing selling and purchasing processes. E-tailing
is considered as one of the rapidly expanding
segments of the retail market. Hence businesses
need to be able to find a way of providing their
products and services online so that they do not
miss out on a share of the market that demands
and needs online purchasing.
So far, in the current literature, there is limited
research on the state of e-tailing in Australia spe-
cifically with no focus on top retailers’ adoption
of e-tailing. Therefore, the purpose of this chapter
is to examine the extent of the utilisation of the
Internet in providing an electronic retailing me-
dium by the top twenty-five retailers in Australia.
Shackel (1984) has defined usability as the ability
of a system to be used easily and effectively by
humans, allowing them to complete the specified
tasks within a range of scenarios. It is important
that online stores are easy to use with minimal
distractions so that there is a positive perception
of e-tailing in the minds of consumers. Retailers’
websites should facilitate the purchase process
and also help in disseminating organisational
information easily and effectively. Successful
electronic retailing is dependent upon all aspects
of the shopping experience, including the usability
of the retailers’ website.
The remainder of this chapter is organised as
follows. The following section provides a literature
review that has been segregated into two subsec-
tions, outlining the state of electronic retailing and
an overview of Internet adoption in Australia and
E-Tailing
its use for online shopping. The third section delves
into the opportunities and challenges of e-tailing.
The fourth section provides some examples of
products and services specifying their suitability to
physical retail stores, electronic retail stores and a
combination of both. The fifth section outlines the
research methodology that was adopted for data
collection. Findings and discussion then follow to
provide an analysis of usability of Australia’s top
twenty-five retailers’ online stores. Finally, the key
premises of the research have been summarised
and the chapter’s limitations are explicitly stated
with an outlook for possible future research. This
research makes no implication that one retailer’s
site is better than another. The intention is to
highlight the usability of the retailers’ websites
and to allow for a better understanding of the adop-
tion of e-tailing in Australia. This chapter is an
indispensable source of information for retailers,
vendors, suppliers, business partners who would
like to gain an insight and avail the opportunities
proffered by electronic retailing.
LITERATURE REVIEW
State of Electronic
Retailing (E-Tailing)
E-tailing became a reality in 1991 when the Inter-
net was opened for commercial usage. Amazon
launched their site in 1995 and can be considered
as the one of the pioneers of electronic retailing.
A lot of other companies (Dell, eBay) shortly
joined the band wagon although the real uptake
was after year 2000 when the Y2K issue had been
resolved. There has been no looking back ever
since as retailers realised the benefits of attracting
their customers in cyberspace.
Today the world is becoming borderless and is
fuelled by customers’ access to information, prod-
ucts, and services “anytime anywhere” concept.
Online retail sale of goods and services is called
electronic retailing or e-tailing (Wang, Head &
Archer, 2002). In this model, retailers sell goods
and services directly to the customers bypassing
any intermediary also called disintermediation
(Porter & Millar, 1985; White & Daniel, 2004).
E-tailing can be defined as an Internet-based busi-
ness that sells its products and services online.
It suggests the physical analogy of buying in a
brick and mortar (physical) store albeit in this
case an online world. Currently several retailers
are just emerging in the Internet shopping arena
because they need to be seen at the forefront of
technological adoption. E-tailing still has a long
way to go in Australia and it has the potential to
change the structure of the marketplace. Although
e-tailing has not been adopted by a lot of major
retailers, recently retailers like Big W and Kmart
have started selling some items online. However,
non-adoption does not mean that it is a passing
fad. Research indicates that only 13% of retail-
ers were trading online in Australia (Charlton &
Taylor, 2004). This means Australian retailers
are not harnessing technology to improve their
customers’ experience and nor reducing their
operational costs. This also proves that businesses
still prefer to operate as brick and mortar as op-
posed to “pure clicks” (only retailing online). Most
companies have adopted a safe haven of clicks
and bricks (physical presence along with online
retailing). Interestingly this survey also found that
49% of online retailers estimated that electronic
retailing accounted for less than 5% of their gross
turnover (Charlton & Taylor, 2004). A research by
Australian Interactive Media Industry Association
(2010) Retail Industry Group has predicted that
83% of Australian retailers are expected to increase
their online budgets for 2011 which is a good sign
going forward for both customers and retailers.
Findings of a study by Gribbins and King
(2004) have revealed that the development of a
transaction website is often not the initial strategy
to generate online sales. Small businesses prefer
strategies that are less intrusive to their physical
operations. It all boils down to the customer’s
perception of the ease of online retailing and
299

whether it offers any benefits or not. Although
the adoption of online retailing also depends on
the personality traits of the customers accompa-
nied with high levels of confidence in the usage
of technology (Dholakia & Uusitalo, 2002), the
trends indicate that adoption of online retailing
is ascending rapidly. The ensuing years will
definitely not bring a decline as we move from
Generation X to Generation Y whose adoption and
usage of technology is definitely higher.
The competitiveness of both Australian and
global market e-tailing is rapidly rising. Projec-
tions of the potential market for electronic retailing
vary widely. Jupiter Research (2006) has fore-
casted that online sales will grow 12% annually
to $144 billion in 2010. Research conducted by
Forrester Research (2006) that was published by
Shop.org, indicates that online retail revenue is
projected to reach $211 billion in 2006, demon-
strating an increase of 20% of last year’s $176
billion. This shows that adoption of electronic
retailing is on the rise from both the buyer and
seller’s end as there is constant evolution of tech-
nologies to improve the offerings.
According to an estimate by the United States
department of commerce, e-tailing in United States
totalled $165.4 billion in 2010 demonstrating an
increase of 14.8% over 2009(Enright, 2011). The
IMRG Capgemini e-retail sales index revealed
that £58.8 billion was spent online in 2010 that
shows an increase of 25% year-on-year (IMRG,
2011). Online retailing revenues in Japan have
also been on rise every year by approximately
17% since 2005(The Economist, 2010). The
widespread adoption of e-tailing is a good indica-
tor that customers are accepting this medium of
retailing. This is also a reminder to non-adopting
businesses that e-tailing should form an integral
part of strategic planning so they are ready to
respond to the changing needs of their customers.
With 2.6 million websites and 210 million
Internet users, online shopping in China topped
$8.2billion in 2007. As the number of Internet
users increased to 457 million by the end of 2010,
300
E-Tailing
it is forecasted that online sales that currently
accounts for less than 1% of China’s total retail
sales would escalate to 8% by 2012(China Today,
2011). Part of this surge can also be attributed to
the growth in online advertising and availability
of Internet on mobile phones.
With these positive forecasts, ultimately
adopting the Internet as a distribution medium
positively depends on the communication avenues,
accessibility of consumers and cost savings on
entering new markets (Doherty, Ellis-Chadwick,
& Hart, 1999). At the other end, inhibitors can be
security, trust, and technical issues that prohibit
customers from buying online. It is also pointed
out that understanding the enablers and inhibitors
of e-commerce adoption has become increasingly
important (Zhu, Kraemer & Xu, 2003).
Internet Adoption and Its
Use for Online Shopping
An electronic commerce analysis by consulting
company, Frost and Sullivan (2010) has reported
that Australia’s e-commerce market is immature
and lagging behind the US and UK markets by
approximately three years. The report also pointed
out that online retail spending in Australia in 2010
is expected to account for approximately 5% of
total retail sales. This is an indication that more
physical retailers must make the move to e-tailing
to be successful. The report has also predicted
that Australia’s e-commerce market will double
in size over the next four years growing from $12
billion in 2010 to $18 billion by the end of 2014.
The retail industry is one of the biggest revenue
generating industries in many countries. Retailing
of goods and services accounts to over two-thirds
of all economic activity in the USA (Kotzab &
Madlberger, 2001). At the end of 2005-06 financial
year, there were 156,668 retailers operating in
Australia with more than 1.2 million employees
and a total income of $292.3 billion (Australian
Bureau of Statistics, 2007). According to Austra-
lian Bureau of Statistics (2009), in 2008-09 72%
E-Tailing
of Australian households had home Internet access
and from 1998 to 2008-09, household access to the
Internet at home has more than quadrupled from
16% to 72%. Socio-economic characteristics of
households influence the rate of computer, Inter-
net and broadband connectivity across Australia.
The Australian Bureau of Statistics (2008a) also
reported that 64% of Australian homes had access
to the Internet in 2006-2007 compared to 35% in
2001 which demonstrates a substantial growth
in the usage of Internet as a way of accessing
information, communicating and purchasing
goods and services online. 98% of the 9.9 million
users who used the Internet at home used it for
personal and private reasons that included sending
and receiving emails and purchasing goods and
services online. Of the 11.3 million people who
used the Internet at any location, 61% used it for
buying goods and services online for private use
(Australian Bureau of Statistics, 2008b). As this
data reveals, while most of the web users are also
online shoppers in Australia, online retailing is still
far from competitive. Nonetheless the predictions
are optimistic. Research Company IBISWorld es-
timated that Australian online spending will grow
by at least 5.5% annually for the next five years,
from $15.1 billion in 2007-08 to $21.2 billion in
2013-14 (Tadros, 2009). A more recent report by
Forrester Research (2010) predicts similar trends
with forecasts that indicated online retail sales in
Australia will almost double from $16.9 billion
in 2009 to $33.3 billion in 2015.
With recent economic downturn and tight
budgets, consumers are now turning to online
shopping for better bargains. Retailers can cap-
ture shoppers’ interest with factors other than
price, such as trust, after sales service, a returns
policy and quick delivery. Australian retailers,
regardless of size, have to make use of this trend
of multi-channel shopping as more and more
consumers are turning to the Internet, especially
for information, before visiting physical retail-
ers. Shoppers go online searching for product
information using major search engines and price
comparison engines first before hitting a physical
store. Often an online presence opens up a sales
window for physical stores since the method of
product research has changed vividly in recent
years with the emergence of online retailing. A
survey conducted by the global information and
media company Nielsen on Internet shopping
habits revealed that more than 85% of the world’s
online population has used the Internet for purchas-
ing (Nielsen Company, 2008). The most popular
purchased items through the Internet are books,
clothing/accessories/shoes, videos/DVDs/games,
airline tickets, and electronic equipment in that
order. It was also reported that over the past two
years the number of consumers who had shopped
online has grown from 627 million to 875 mil-
lion, demonstrating an increase of around 40%.
Recent demographic findings have also outlined
that people from all ages are using websites for
shopping and the driving force behind this is ‘ex-
pediency’ compared to price. Some key reasons for
customers shopping online are convenience, low
cost, variety of stores and products, no travelling
time, ability to avoid impulse buying and anytime
shopping (Morganosky & Cude, 2000; Ramus &
Nielsen, 2005).
Given the recent fall of Borders physical
stores it has become important than ever before
for retailers to embrace e-tailing. A recent study
by market research firm Colmar Brunton (2011)
has uncovered that Australian consumers are
demanding more online shopping options. The
survey also indicated a steep increase in online
shopping across Australia with 40 percent people
choosing online retailing over their physical retail
counterparts. The report also indicated that 85 per-
cent of people shop online due to the convenience,
49 percent shopped online because there were no
parking hassles, traffic and waiting queues whilst
66 percent believed that online deals were simply
better. Trust seemed to be the cornerstone with 86
percent of Australian consumers stating that they
only preferred shopping from trusted websites.
301

There is no doubt that many retailers are turning
to the Internet to promote and sell their products.
Many have reached a stage where a large section
of their operation is done through online retailing
for reduced transaction costs, increased accuracy
and timeliness of delivery. Research has shown
that trust, security, detailed product information,
easy navigation, and price are vital for any online
business as these factors influence a customer’s
decision to buy online (Tilson et al,1998; Lee &
Turban, 2001; Turban et al, 2006).
OPPORTUNITIES AND
CHALLENGES OF E-TAILING
Considering the pace at which technology is
changing, there is enormous uncertainty about the
future contour of e-tailing. Corporate executives
now have to make sense of mushrooming e-tailing
ideas and analyse business strategies and concepts
to reorganize business models that create oppor-
tunities in a growing web-based market. Tech-
nology may facilitate advantageous revelations
of what e-tailing can accomplish, so every busi-
ness should be considering opportunities across
realms of sales and marketing, customer service
and operations to tailor support their individual
needs. In order to understand and fully explore the
opportunities, technological development needs
to be categorised into different domains such as
business, teamwork, communication, relationship
and computation. By identifying and addressing
the opportunities, e-tailing can be exploited to
offer innovative products, address marketplace
issues, join forces with business partners, alter
business practices and deliver services. E-tailing
also provides an opportunity to access global
markets and strengthen the relationship between
the customer and retailers (Kaufman-Scarborough
& Forsythe, 2009). Further, it can help provide
value added services such as product information
with specifications, comparison with other brands,
and customer reviews and ratings to help price
302
E-Tailing
sensitive shoppers with their decisions (Garfin-
kel et al, 2008). Instantaneous communication,
synchronization, and alliance across the Internet
are helping firms lower their transactional costs
through implicit amalgamation with suppliers
and customers. Internet economy thrives on in-
frastructure and by easing up charges associated
with dedicated access; e-businesses can increase
their potential by lowering costs and infiltrate a
wider market. Variables include Internet users
shopping orientation, comprehension of web
security, shopping novelties, satisfaction with
websites, importance of inspecting products
and price sensitivity; all such attitudes have an
influence on web retailing(Cheung & Lee, 2005;
Kim & Park, 2005). Poorly designed websites
that are difficult to navigate or sites that appear
amateurish do not mount trust in customers. The
Internet and e-commerce are no longer inimitable
as both have become conventional mediums in
commerce and communication. By embracing
Internet and e-commerce, a business can create
opportunities to build strategic and operational
business models to gain a sustainable advantage
over their competitors.
While several business models relevant to
ecommerce are available, what is suitable to each
business is not always clear. For example online
retailers can blend several models like advertising,
subscription, sponsorships and so forth as part
of their overall Internet business strategy to earn
profits. Ultimately, a business model that has a
customer focus rather than product focus should
be an integral component of successful e-tailing.
With millions of businesses clamouring for at-
tention, e-retailers need to develop strategies that
attract customer loyalty to gain viable advantage
over their competitors. One of the advantages of
e-retailing over physical stores is customization
of information on the web. Web customers can
draw any information from websites the way they
want it, whenever they want it and also in the
form they want it. By customising information,
E-Tailing
the probability of a customer to buy what they
want can be increased.
Although e-tailing provides new opportunities
to increase profits and also helps to gain more
customers, there are several challenges in selling
goods online. Some of these challenges include
providing secure payment channels to customers,
maintaining the accuracy of content on websites,
re-engineering the current processes to make them
compatible online, prompt delivery and customer
service, additional costs to develop applications
for mobile devices and employing skilled people
to manage the sites(Dennis, Fenech & Merrilees,
2004). Developing an interactive website and
maintaining the accuracy of the content on the
website, is a significant challenge for businesses
(Hofacker, 2008). Research indicates that online
shoppers prefer to have more information about
the products, particularly about product specifica-
tions, customer ratings, comparison of products
and their prices between brands (Burke, 2002).
Choosing the right colours, content and making the
website user-friendly are very important because
it is the often the only way of interaction between
the e-tailer and consumer (Bramall, Schoefer &
McKechnie, 2004).A key challenge for any e-
tailer is to deliver increasingly complex data to an
insatiable and growing user population to make
shopping a pleasurable experience by providing a
fast, uncluttered and easy to navigate site (Anand,
2007). Research has shown that customers get
frustrated while navigating sites and customisa-
tion of information by e-tailers helps to alter or
taper options for individual customers thus reduc-
ing their frustration and improving value for the
customer (Thirumalai & Sinha, 2009). The core of
e-commerce is information and communication.
Providing effective and efficient ways in which
buyers can gather information rapidly about prod-
ucts and services are vital for its success.
The Internet is a poor service delivery channel
as it does not provide the direct personal inter-
action provided by non-Internet based services
(Kolesar & Galbraith, 2000). Customers evaluate
services on the basis of tangibles, responsiveness,
compassion, assertion, dependability and control.
These service qualities or tactile cues depend on
the customers’ perception of the overall service
experience. One of the inadequacies of Internet
based retailing is the lack of tactile cues that can
have a negative impact on customers online pur-
chasing. In brick and mortar stores, customers can
feel, try, smell and hold the product which gives a
satisfactory shopping experience but online stores
do not give sensory support to their customers.
Trust and privacy play a vital role in helping
consumers overcome perception of risk and in-
security (Turban et al, 2006). Shoppers are wary
of divulging their personal information on the
Internet as it is a public domain and is susceptible
to unauthorised interference. Even with security
arrangements like passwords and firewalls, cyber
criminals have exploited Internet weaknesses to
hack retailers’ sites to gain access to credit card
and banking information (Hancock, 2001). As the
Internet is largely unregulated, privacy invasion
is a pressing concern for any online buyer. Today,
a customer is asked to provide several layers of
information for authentication, yet hackers can
still find a way to crack the sites. With phishing
websites, email scams and key logging on the rise,
security has become a growing peril. Constraints
are necessary to minimize fraud and to secure
the customer’s data including their financial in-
formation (Kotzab & Madlberger, 2001). There
are inherent socio-cultural barriers that hinder
the adoption of e-tailing. Some socio-cultural
barriers are lack of transactional trust, no social
interaction, and poor understanding of language
and content (Lawrence & Tar, 2010).
While some threats are real, some are based on
fallacy. Retailers have to move beyond the basics
and work hard towards minimising these cracks
in Internet security. Consumers are demanding
more privacy than ever before and e-retailers
need to make a conscious effort to put up proper
layers of security and build customer relationships
based on trust.
303
 E-Tailing

Table 1. Suitability of products and services to retailing channel

Product/Service Physical Retail stores Electronic Retail Store Combination of both

Travel and banking Services Suitable Suitable Suitable
Real Estate Suitable Unsuitable Suitable
CDs, DVDs and books Suitable Suitable Suitable
Toys Suitable Suitable Suitable
Sporting goods Suitable Suitable Suitable
Jewellery Suitable Unsuitable Suitable
Perfumes Suitable Unsuitable Suitable
Clothes Suitable Unsuitable Suitable
Vegetables/Food items Suitable Unsuitable Suitable
Software Suitable Suitable Suitable
Electronic equipment Suitable Suitable Suitable
Insurance Products Suitable Suitable Suitable
Wine Suitable Suitable Suitable
Medicines Suitable Unsuitable Suitable
Gift and Phone Cards Suitable Suitable Suitable
Entertainment Tickets Suitable Suitable Suitable
(Adapted from Sorce, Perotti, & Widrick, 2005; Phau & Poon, 2000)

SUITABILITY OF THE RETAILING experience the physical characteristics (Phau &

CHANNEL FOR DIFFERENT
PRODUCTS AND SERVICES
Unlike customers of physical retail stores, In-
ternet shoppers cannot see, touch or smell the
products before buying. Instead, they only rely
on the description of the products provided by
the retailer. This increases the level of perceived
risk and makes it difficult for customers to decide.
This perceived risk can be seen as a deterrent of
electronic retailing adoption by customers (Ruyter,
Wetzels & Kleijnen, 2001). There are various
products and processes that are not suitable for e-
tailing, such as clothes, vegetables, perfumes, and
so forth because customers cannot experience the
physical characteristics of these products. Product
suitability for e-tailing could also be assessed on
the basis of value-to-weight ratio, smell, taste
or touch characteristics and trial fittings. Travel
tickets, CDs and software are most suitable for
electronic retailing as customers do not need to
Poon, 2000). Table 1 below outlines examples
of products and services specifying suitability to
physical retail stores, electronic retail stores and
a combination of both.
Many firms with traditional physical stores
view electronic retailing as an opportunity to at-
tract more customers and increase the market
share, which can lead to an increase in profits,
because of access to global markets (Nikolaeva,
2006). Considering the various types of products
that cannot be sold online, physical stores will
never go out of business and electronic retailing
will be used to complement existing channels.
However retailers can attract online shoppers by
offering better deals compared to physical stores.
Online stores can save on operational costs such
as rent, electricity, qualified staff, payroll and
contribute such savings towards cutting the cost
of products in the form of deals of the day, free
shipping costs and online saving codes.

304
E-Tailing
RESEARCH METHODOLOGY
The top 25 retailers that were identified as the
sample population for this research were sourced
from the Inside Retailing Magazine’s 2010 Top
25 Retailers Rankings (Inside Retailing, 2010).
These rankings have been based on the financial
performance of the retailers. The sales data, ac-
cording to the specific retail category, has been
presented in Table 2. Figure 1 indicates the break-
down of the top 25 retailers according to their retail
categories. This study analysed website usability
through heuristic evaluation (Kantner & Rosen-
baum, 1997). This evaluation method is based on
evaluation carried out by experts who scrutinize
and use a website to discover usability problems
that they believe would affect end users (Nielsen,
1994). The retailers’ websites were analysed using
a quantitative retailer website evaluation survey
that had 18 close-ended questions. The process of
developing the questionnaire balanced the needs
of validity, reliability and practicality. Evaluation
and re-evaluation was carried out to establish the
reliability of the survey. There was zero differ-
ence between the evaluation and re-evaluation
scores indicating 100 percent reliability of the
instrument. The questions in the survey helped
in determining factors relating to navigation,
searchability, purchasing, layout and visual clar-
ity, information content and others pertaining to
online web browsers support and the usage of
cookies. The collated results of the survey have
been presented in Table 3. Initial web presence
of the retailers was determined using the Google
search engine. Website evaluation was conducted
in March 2011. In order to ensure consistency
of results, specifically for the load times of the
websites, all evaluations were carried out at the
researchers’ workplace with Internet that uses
fibre optic backbone @ 100mbits with dedicated
virtual private network tunnelling. Many online
website load testing tools were evaluated but
most tools only offer page loading estimates by
downloading a limited amount of data but Ping-
dom (2011) downloads the entire page providing
an accurate picture of the download time. Thus,
Pingdom was selected to test the load time of the
retailers’ homepage.
FINDINGS AND DISCUSSION
It is remarkable to note that out of the top twenty-
five retailers that were investigated, 56% offer
online purchasing options, although there is a
100% web presence rate. Since this study only
surveyed Australia’s top 25 retailers, it is possible
that the size of the retailers was an important factor
in the adoption rate, nevertheless, it can be argued
that 56% adoption rate is not very promising.
Amongst the five supermarkets surveyed only
two offered online purchasing. All the five depart-
ment stores surveyed offered online purchasing.
This demonstrates that product category proves
to be a determinant in the e-tailing adoption with
some categories showing a high level of adoption
over others.
Big W has recently embraced e-tailing and now
offers a wide variety of products online whereas
Myer and David Jones offer a limited range of
products for online purchasing. Target and Kmart
only sell catalogue items online with the exception
of some other items. Harvey Norman does not of-
fer online purchasing although allows customers
to create a wish list of items for future viewing.
Spotlight and Target offer online purchasing using
traditional order forms that can be very cumber-
some to complete in comparison to the use of
shopping carts. Fifty six percent of the surveyed
retailers sell gift cards on their websites. Twelve
percent of this cohort uses external providers for
retailing gift cards. It is interesting to note that out
of the 44% that do not offer online purchasing 8%
sell gift cards through their website which is also
online retailing but for the purposes of this chapter
selling gift cards does not constitute retailing of
their primary products and services. In the case
of Spotlight Group, customers cannot buy cards
305
 E-Tailing

Table 2. Top 25 Australian Retailers for 2010 (Source: Inside Retailing, 2010)

# Retailer Name(ranked according to sales) 2010 Sales(in AUD)

1 Woolworths food and liquor + www.woolworths.com.au $34.2b
Coles food and liquor +
2 www.coles.com.au $23.34b
Harvey Norman
3 www.harveynorman.com.au $7.70b
Bunnings Warehouse
4 www.bunnings.com.au $6.24b
Woolworth Big W
5 www.bigw.com.au $4.32b
Kmart
6 www.kmart.com.au $3.98b
Target
7 www.target.com.au $3.88b
Myer
8 www.myer.com.au $3.30b
JB HiFi
9 www.jbhifi.com.au $2.67b
Aldi *
10 www.aldi.com.au $2.43b
David Jones
11 www.davidjones.com.au $2.01b
The Good Guys *
12 www.thegoodguys.com.au $1.70b
Dick Smith
13 www.dicksmith.com.au $1.59b
Reece Plumbing
14 www.reece.com.au $1.51b
Officeworks
15 www.officeworks.com.au $1.37b
Chemist Warehouse Group #
16 www.chemistwarehouse.com.au $1.30b
Retail Adventures
17 www.retailadventures.com.au $1.00b
Terry White Chemists*
18 www.terrywhitechemists.com.au $1.00b
Spotlight Group
19 www.spotlight.com.au $979m
Repco (Exego Group)
20 www.repco.com.au $969m
Supercheap Auto
21 www.supercheapauto.com.au $889m
Franklins
22 www.franklins.com.au $870m
Just Group
23 www.justgroup.com.au $849m
Ritchies IGA
24 www.iga.net.au $820m
Peregrine Corporation
25 www.perecorp.com.au $820m

306
E-Tailing

Figure 1. Top 25 retailers of 2010 according to their retail categories

Table 3. Collated Results of the Survey

307

online however can register cards bought from
physical stores and check their balances online.
Just Group, Peregrine Corporation and Retail
Adventures have different brands under their
umbrella with each brand having its own dedi-
cated site. Analysis of the Just Group, Peregrine
Corporation and Retail Adventures sites did not
reveal any useful outcomes for the purposes of
this study as the sites were primarily a portal for
their brands. To eliminate any redundancy and
confusion, only one brand (Peter Alexander - a
clothing and fashion accessories retailer of the
Just Group, On The Run - convenience stores
of Peregrine Corporation and Sam’s Warehouse
- discount variety retailer of Retail Adventures)
was evaluated. It is possible that other brands of
Just Group, Peregrine Corporation and Retail
Adventures may have usability characteristics
and functions that are not reflected in either Peter
Alexander, On The Run and Sam’s Warehouse.
Data analysis also revealed that the provision
of information content was the prime focus of
all the surveyed retailers. All the retailers had
information about the company, 100% provided
a store locator function making it easier to search
for store location and 92% had online catalogues
that were an extension of their advertising cam-
paigns. Seventy-two percent of the retailers had
the returns policy displayed on their website,
irrespective of the fact of whether they offered
online retailing or not. These policies were ap-
plicable for customers regardless of where they
shopped. Ninety-two percent retailers displayed
the company’s privacy policy which generally
outlined the type of personal information the site
collected, how the information is used, how the
information collected can be accessed and the
security measures the company takes to protect
personal information. It was evident from the
privacy policies exhibited on the retailers’ sites
that the Australian National Privacy Principles for
the Fair Handling of personal information were
being followed.
308
E-Tailing
All the retailers had information about careers
and recruitment displayed on their sites. This
included but was not limited to: employment op-
portunities, ability to apply online for positions
and also the ability to create profiles allowing the
company to alert potential candidates.
Under the search category, 68% of the retailers
had an in-site search tool. The non-availability of
an in-site search tool in the remaining 32% often
made it difficult to search for the information
within the site. Fifty-six percent of the retailers
had a site map that listed the pages in the website
in a hierarchical manner. Apart from helping us-
ers locate the site’s content, site maps can also
improve search engine optimisation by ensuring
that all the web pages in the site can be found.
Ninety-six percent of the sites were clearly laid
out and visually appealing. All of them avoided
unnecessary animation, especially at the site entry
point, since it is often frustrating for consumers
to look at an entry splash page. JB Hi-Fi has
used a bright yellow colour that is irritating to
look at after an extended period of time although
understandably the colour has more to do with the
company’s use of yellow colour in its branding
and identification. The load time of the retailers’
website home page was also determined. Three
tests were performed on different dates and times
of the day to ascertain the average load for each
site. In the case of 4 retailers, the processing to
ascertain the load times of the webpages was au-
tomatically stopped by Pingdom because timeout
exceeded 30 seconds. The average load time for
the remaining 21 retailers was 11.91 seconds.
The fastest site to load was Target at 1.3 seconds
whilst the slowest site to load was Supercheap
Auto at 24.93 seconds. Figure 2 details the load
time for retailers’ website home page. 24 percent
of the retailers’ home pages took 10-15 seconds to
load while 8% of the retailers’s home page took
20-25 seconds to load.
Cross browser compatibility checks were car-
ried out in four different browsers (Internet Ex-
plorer, Firefox, Chrome and Safari) that custom-
E-Tailing
Figure 2. Load time for retailers’ website home
page
ers are more likely to use. All the sites had a
consistent look and the homepage loaded uni-
formly across the browsers. This proves that web
designers develop sites that are supported by
multiple browsers. Eighty-eight percent of web-
sites surveyed use cookies that are useful for
identifying the customer, their preferences, shop-
ping cart contents and other data to help in en-
hancing the purchasing process. Despite the
controversy surrounding cookies, they are impor-
tant for differentiating customers and to maintain
customer browsing data, often across multiple
visits.
In order to dispel competitors and increase
sales, businesses have to adopt the Internet and
related technologies for retailing, advertise on
the web, consider strategies to identify global
customers, take a proactive approach and expand
their scope, gain a strong understanding of how
to satisfy customers, use distribution systems to
handle large volume of e-orders and incorporate
a strong brand presence. However it is important
that the e-tailing business strategy is designed by
keeping into account the characteristics of products
and services and their suitability for being sold
through the Internet.
CONCLUSION
This chapter makes a contribution to the limited
existing body of knowledge about electronic retail-
ing. The justification for this chapter arose from
the recognition that there is limited theoretical and
empirical research into the state of e-tailing adop-
tion in Australia and there still remains significant
scope to further our understanding. This study has
provided an overview of the state of e-tailing in
Australia. E-tailing will allow businesses to work
smarter and provide customers a ubiquitous chan-
nel to facilitate transactions. E-tailing undoubtedly
has the capacity to transform the market place.
A significant number of the existing top retailers
have well developed websites but do not have
any provision for selling online. It is imperative
that the online retailing medium is exploited to
enable businesses operate more efficiently without
changing the fundamental way of doing business.
As with any research, this chapter has limita-
tions. Looking at the top twenty-five retailers
does not constitute a large sample thus further
studies could look at a larger sample. Also, it
was not practical to collect and analyse a large
number of usability factors, so the questionnaire
was limited to 18 questions that were deemed
to have significant influence on usability. This
study has also neglected an analysis of customer
needs, wishes, and behaviours towards electronic
shopping. This calls for further study to better
understand consumer behaviour and adoption
patterns in Australia. This chapter has not looked
at the number of hits that these retailers’ websites
get to prove their popularity but that could be the
focus of another study. Also, whilst this chapter
focuses largely through personal interest in the
retailing sector, a similar study can also be initi-
ated for analysing the adoption of the Internet by
government.
In spite of these limitations, the results obtained
from the current study are promising and advances
our knowledge of the state of electronic retailing
in Australia. Even if online retailing accounts for a
309

small percentage of aggregate sales, it can be pre-
dicted that electronic retailing will only continue
to grow significantly in the future. It would come
as no surprise to see retailers derive benefit from
e-retailing and expand into previously untapped
markets. Thus, all retailers should adopt a multi-
channel strategy to increase sales by leveraging
their online presence, as consumers increasingly
use the Internet to search for product information
and compare prices. To conclude e-tailing has
many opportunities to offer for businesses how-
ever it requires more initiatives from businesses
to attract customers. The 44 percent retailers that
do not offer online purchasing options need to use
e-tailing technologies to their advantage and need
to join the e-tailing bandwagon rather soon. It
has become more important than ever before that
Australian retailers focus on the considerable value
that e-tailing has to offer. Successful e-tailing has
the potential to offer greater choice and a better
match between what customers want, what they are
offered, and how quickly it is delivered to them.
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KEY TERMS AND DEFINITIONS
Brick and Mortar Retail Strategy: A tradi-
tional retailing strategy where a firm retails its
products and services through physical stores.
Business-to-Business (B2B): Electronic com-
merce between two business firms.
Business-to-Commerce (B2C): Electronic
commerce between a firm and its customers.
Clicks and Bricks Retail Strategy: A retail-
ing strategy where a firm maintains both physical
stores and web presence to sell products & services.
Cookies: A small text file that is stored in cus-
tomers’ computer which helps to uniquely identify
web customers and their preferences when they
visit an online retail store.
Cross Browser Compatibility: Refers to the
accessibility of company’s website through dif-
ferent Internet browsers.
E-Commerce: Refers to electronic commerce
that implies buying and selling of goods & services
online using web technologies.
E-Tailing: Refers to online retailing that im-
plies selling of retail goods and services online
using web technologies.
Firewall: A protective mechanism to stop
intruders from entering an organisation’s network.
Internet Shopping: Browsing and purchasing
of products & services through a firm’s website.
Pure Clicks or Clicks Only Retail Strategy:
A retailing strategy where a firm trades products
& services online only using web technologies.
313