Australians spent $15.6 billion online in the year to July 2014, up 8.6% on the previous year according to National Australia Bank’s (NAB) latest Online Retail Sales Index.

Online sales are now equivalent to around 6.6% of traditional retail spending, up from 6.3% for the same time last year.

By sector, Groceries and Liquor experienced the fastest growth, with online sales rising 15.9% in the past year, while Department and Variety Stores also saw online sales expand by 11.5%.

Online sales in Electronic Games and Toys fell 15% compared to a year ago, though this sector is highly volatile with growth driven by new product releases and sales campaigns.

While online retail remains dominated by those aged 35 and 44, older Australians are also experiencing solid growth. Over 65s have now seen positive growth in online shopping for 11 consecutive months, with spending rising a further 0.9% in July.

NAB Chief Economist Alan Oster said that despite the recent pick-up in the traditional retail sector, it was still being outpaced by the improvement in online retail growth over the past quarter.

“While the rebound in online retail in recent months is encouraging, growth remains considerably more subdued than the 20% and 30% growth rates we saw in 2011 and 2012,” he said.

“Online retail continues to be dominated by the Department and Variety Stores, which are responsible for 34% of total online spending, followed by the Homewares and Appliances sector with 16% and Groceries and Liquor with 15%.”

NAB’s Retail Sector Head, Tiernan White said: “With more over 65s now shopping online, older Australians are increasingly becoming an important target group for online retailers.”

“Age also plays a significant role in how Australians shop online. While all age groups shop most online with Department and Variety Stores, those aged over 65 spend more than a quarter of their online dollar (28%) on Groceries and Liquor.”

View the full report here.