Christopher Adams

Christopher Adams is the Markets and Banking reporter for the New Zealand Herald

Websites reeling in shoppers

Web-based retailers are giving their bricks-and-mortar counterparts a run for their money in the battle for festive season sales.

Internet sites avoid the expensive upkeep of physical retail stores and don't have to pay wages to shop-floor staff, giving them a competitive edge over traditional operators.

And their customers can shop 24/7 from the comfort of their own home.

Competition from the web will be one of the factors placing pressure on retailers' margins this Christmas, says Morningstar equities analyst Andrew Lange, who covers a number of NZX-listed retail firms.

Internet shoppers spent record amounts in the United States this week as retailers ramped up online promotions for what has been coined "Cyber Monday", which follows the Black Friday Thanksgiving shopping spree.

In this country, online retailer nzsale.co.nz says its revenue last month was three times higher than during the same period last year.

Mike Hall-Taylor, the website's chief marketing officer, says online stores tend to see their Christmas rush in November, as their customers want to make sure they receive the products well ahead of December 25.

Nzsale.co.nz claims to have amassed a membership of more than 550,000 Kiwi cyber shoppers in just three years of operation, and Hall-Taylor says the internet is changing the face of Christmas retailing.

"There's an online retail revolution taking place," he says. "We're just one part of that."

He says nzsale.co.nz sources its products - which include adult fashion, toys and children's clothing - in bulk from brands that have excess stock.

"That enables us to have the incredibly good prices that we offer," Hall-Taylor says.

Most bricks-and-mortar retailers have a web-presence these days. At their annual shareholders' meetings last month, Pumpkin Patch, Kathmandu and The Warehouse all highlighted their efforts into growing their online stores.

However, the buying power of the New Zealand dollar, which has been at record levels against the greenback this year, makes overseas websites like amazon.com a juicy proposition for local consumers.

Additionally, overseas purchases of items worth under $400 are not subject to GST. That riles the Retailers' Association, which has been putting pressure on the Government to make all goods bought overseas subject to the consumer tax.

Online shopping

What products people were searching for online during the first half of November, compared with the same period last year.

Hot

1. Apple iPad... +1800 per cent

2. Samsung Galaxy S... +600 per cent

3. Amazon Kindle... +240 per cent

4. Microwaves... +101 per cent

5. PSP video games... +92 per cent

Not

1. Freeview TV products... -53 per cent

2. Apple iPods... -31 per cent

3. Espresso machines... -29 per cent

4. Trampolines... -26 per cent

5. Kinect games... -25 per cent

Source: PriceMe.co.nz

- NZ Herald

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