The CEO of Officeworks claims that selling online is not as profitable as selling goods in a store.Ward, who was speaking at the Retail World conference in
Melbourne, blamed “small” purchases for a fall in online profitability.
He said that while
online sales accounted for 13 percent of Officeworks’ sales, they generated
less than 10 percent online despite less staff and lower lease costs.
“We are selling more online than we ever were before…we are selling more units; we have more transactions going through our
entire business,” he said. “But we are selling them for less, as
basket sizes have come down because we have made life so convenient for the
“That’s not a bad thing, but it does have implications
for your profitability because your supply chain is under more pressure than
ever from selling more baskets, more often.”
Big W managing director Julie Coates said retailers needed
“resilience, patience and courage” to stick it out through the early
years of online selling, the Australian reported.
“You’re setting yourself up for the future, not for
today, and you need to be in it now if you’re going to build and learn to
create the multi-option future for the customer,” she said.
Ms Coates said it was vital that any move into online be
integrated into the rest of the business, rather than run as a separate
division, so that both sides could benefit from the capabilities and resources
of the other.