Online retail sales continued to grow in the 12 months to July 2015, although the growth rate is certainly slowing. According to the National Australia Bank's latest online retail sales index, online sales rose 6.2% in the year to July with roughly $17.4 billion spent in total (the equivalent of 7.1% of traditional retail spending).
While that is still reasonable especially in this economic environment it compares to the 32% year-on-year growth recorded in January 2011; and 10.4% growth in June 2015. Meanwhile, growth in online spending actually contracted 1.4% in the month of July, which is a significant deterioration from the revised 2.3% growth recorded in June.
This could be attributed to the Government's $20,000 instant asset write-offs for small businesses, which was announced in the May budget and bolstered sales in June, before the end of the financial year.
The contraction could also be linked to falling consumer confidence and perhaps a weaker Australian dollar, making it more expensive to purchase items online from international stores. Still, although growth in the sector has subsided recently, it's an area that many analysts expect will thrive over the coming years. Indeed, traditional retailers such as JB Hi-Fi Limited (ASX: JBH), Harvey Norman Holdings Limited (ASX: HVN) and Myer Holdings Ltd (ASX: MYR) are all focused on improving their online presence in order to remain in the game, with many consumers preferring the convenience of online shopping.
Of those companies, I personally like JB Hi-Fi the most. Not only has it managed to adapt to the latest consumer trends time and time again (as a perfect example, its recent push into the white goods industry with its new HOME format stores), it also maintains reasonable growth prospects and a fat, fully franked dividend yield. Its shares currently trade for $18.73 on a fully franked yield of 4.8%, grossed to 6.9%.
