Consumer Discretionary: Web Traffic in 2022 - A Competitive Analysis

About the author:

Author name:

By Alexander Mees

Job title:

Co-Head of Research and Senior Analyst

Date posted:

08 February 2023, 7:30 AM

Sectors Covered:

Gaming and Retail

• The post-COVID normalisation of consumer behaviour saw a return to shopping in-store and a moderation in sales online over the course of 2022. The penetration of online sales declined from 11.3% in 2021 to 10.8% in 2022, although a strong Black Friday and Cyber Monday period in 2022 suggested the ecommerce may be reverting to its historic upward trajectory.
• We monitor the monthly web traffic of 228 websites across all key consumer discretionary categories. Across the board, traffic started the year positively but swung negative against strengthening comps annualising the period of extended lockdown in NSW and Victoria in 3Q CY21.
• The best performing categories included Fashion, Luxury Goods and Department Stores. Pure play eCommerce and Homewares generally underperformed. Within our broader universe, the fastest web traffic growth was achieved by Perfect Stranger (ASX:UNI), Babies ‘R’ Us (ASX:TOY) and Canali. The largest decliners were Zanui, Crossroads (ASX:MOZ) and Burson.

Apparel sites were back in fashion

Within our watchlist, ten of the top 20 fastest growing websites in 2022 were fashion and luxury goods retailers. The best growth of all was posted by Universal Store’s (ASX: UNI) Perfect Stranger: +641%, albeit off a low base.

There were also strong performances by the Italian men’s fashion brand Canali, UNI’s Thrills brand, Guess, EziBuy, Balenciaga and Cettire (ASX:CTT). The normalisation of consumer lifestyles post-lockdown saw a big increase in demand for new clothes in which to go out.

This was further evidenced by the 26.0% growth in clothing sales in 2022 reported by the ABS.

Homewares steadily weakened through the year

Traffic to homewares and furniture sites followed a negative trend in 2022, falling back after the COVID tailwinds of 2020 and 2021. All of the sites we analysed that sell furniture tracked downwards.

The Adairs (ASX:ADH) online brand Mocka performed especially poorly, while Amart and Temple & Webster (ASX:TPW) were more resilient. In the lighting category, Beacon Lighting (ASX:BLX) was steady, outperforming many of its smaller peers.

Outdoor and lifestyle brands surprisingly resilient

There was a significant seasonal acceleration in traffic to many outdoor and lifestyle sites as Australia came into summer. Anaconda performed especially well in November and December, although BCF (owned by Super Retail Group, ASX: SUL) was not far behind.

Over the course of the year, traffic to BCF was level with 2021’s excellent performance, while Anaconda was modestly (4%) below last year. Traffic to SUL’s other outdoors brand, Macpac, was 32% higher in 2022 than the year before.

JB Hi-Fi continued to dominate the electricals segment

JB Hi-Fi (ASX:JBH) had a strong 2022, outperforming all of its key domestic rivals with 4% y/y growth in traffic against elevated comps. By contrast, Harvey Norman (ASX:HVN) saw 14% fewer visitors.

JBH’s other brand The Good Guys saw a 1.6% decline in visitor numbers, which again was resilient against strong comps.

Figure 1: Top and bottom performers in web traffic growth, 2022

Source: Morgans Financial, Company

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Disclaimer: The information contained in this report is provided to you by Morgans Financial Limited as general advice only, and is made without consideration of an individual's relevant personal circumstances. Morgans Financial Limited ABN 49 010 669 726, its related bodies corporate, directors and officers, employees, authorised representatives and agents (“Morgans”) do not accept any liability for any loss or damage arising from or in connection with any action taken or not taken on the basis of information contained in this report, or for any errors or omissions contained within. It is recommended that any persons who wish to act upon this report consult with their Morgans investment adviser before doing so.