Australia has staunchly embraced Internet usage as part of its most daily habits – from using smart phone apps to check one’s banking account balance to online shopping, it seems the entire country is online, with a large part also having gone mobile. As such, it’s no wonder that many mothers say they will finish their Christmas shopping online this year. Their reasons are many, but mostly have to do with a wish to avoid bustling shopping strips, as well as stressful outings for and with their children. At the same time, official data released in the midst of the winter holiday shopping season warns retailers against expecting miraculous sales levels this Christmas.
On the one hand, the Newspoll report, issued in mid-November, which interviewed over 1,200 respondents over the phone, says that 37 per cent of the people polled will buy at least some of the presents for this year off the Internet. On the other hand, retailers have recently received encouraging news, which says the holiday season will bring about a $1.2 billion boost in consumer spending this Christmas in Australia. The preference for shopping online is highly understandable of parents, and the data also confirms it. 50 per cent of parents polled will shop for gifts online, as opposed to a substantially weaker 25 per cent of people with no children. Parents are keen on saving time, as well as on holiday special offers, and many of them also enjoy the fact that online shopping allows them to finalize the present list far ahead of the holidays.
The banking industry is also looking over the retailers’ shoulder, in hopes that the positive news forecasted for this Christmas will also bring about a resurgence in credit card usage, as well as in demands for new cards. The second half of this year saw the number of credit card applications drop significantly, as the credit card reform enforced on July 1, 2012, saw banks prohibited from sending their customers unsolicited credit limit increase advertising material. However, the credit card market is not inactive by a long shot, as we discovered through analyzing the offers on http://www.bankwest.com.au/
Also, recent polls, released in mid-November, warn that the much debated official cash rate cuts implemented by Australia’s central bank in 2012 haven’t done that much in terms of helping spending levels increase. The Reserve Bank of Australia has enforced three consecutive rate cuts from May until October, bringing the rate down to 3.25 basis points – the lowest recorded level since 2009. Bank officials and economy experts said the measure was aimed at relieving struggling Australians of some financial pressure (by lowering mortgage loan interest rates, for instance), while also improving consumer sentiment and spending levels. However, a poll for amounts spent on goods and services in Australia throughout the month of October reveals that the country’s spenders are not doling out more cash now than they were in May, before the 1.25 basis point cuts. According to the survey, the Business Sales Indicator put together by the Commonwealth Bank, spending in October dropped by 1.2 per cent, seasonally adjusted – this, after a 3.9 per cent improvement for September.
This doesn’t mean all hope is lost for retailers, says Adam Bennett, the general manager of CBA. Even in spite of a flat-lining retail sector, which has been numb for the past five months, the situation could still improve in time for Christmas, provided, of course, that the global financial landscape relaxes and provides no further reason for worries over economic instability. Bennett also confirmed the 6.2 per cent yearly increase in spending that has been announced for Christmas.