KEY POINTS:
Getting up early to be at a garage sale is one of the great New Zealand Saturday morning pastimes.
But garage sales, second-hand book shops and even purveyors of new goods have had a real competitor in the last few years: the advent of internet trading.
In eight
years, Trade Me has become New Zealand's second most popular website behind Google NZ, capturing 45 per cent of visits to shopping and classified sites.
So popular is Trade Me that the online marketplace has surpassed "sex" and "porn" as a Google word search.
And it's not just Trade Me. Last year, it's estimated Kiwis spent more than $1.5 billion on internet goods and services, and a recent Nielson Media survey showed 1.25 million New Zealanders are shopping online -- four times more than five years ago.
This might be a drop in the bucket for overall retailing but if overseas trends are any guide, traditional retailers might be excused for shaking in their shoes.
Publicly, however, retailers deny the internet's a threat.
"We don't see Trade Me as a major competitor of ours," Cash Converters marketing and communications general manager Sue Tuia says.
Cash Converters, which runs a string of stores selling second hand goods, says it's seen no noticeable decrease in sales due to Trade Me.
Ms Tuia says that's because many of their clients do not use the internet or even have a credit card.
Cash Converters even uses Trade Me, to sell specialised goods to a wider market and to conduct public auctions for abandoned goods.
On a scale of biggest impacts on her business, Ms Tuia says, Trade Me doesn't even feature.
"What affects us most strongly is the value of the New Zealand dollar and the cost of imports."
"Bricks and mortar" retailers also deny that internet trading is hurting sales.
Indeed, says Retailers Association spokesman Barry Hellberg, many retailers are using the internet to supplement their sales, although not as many as one might think.
Among the supermarkets, "only one of the two big companies actually uses the web to sell merchandise," and the country's biggest retailer, the Warehouse, only uses its website to promote its image, Mr Hellberg says.
He believes some consumers refrain from buying online because they fear their credit card details will be misused.
It's also easier to get faulty goods repaired, replaced or refunded from a physical store, he thinks.
"Over the web, that is difficult, for reasons you can well imagine."
Nevertheless, the success of Trade Me has spawned a raft of similar sites.
Some, like Telecom's Ferrit, sell new goods, others provide search engines which compare prices and lead users to retailers.
Others, like Wheelndeal, offer retailers a chance to offload extra stock or bulk goods.
Internet traders are betting on overseas trends which show that 5 per cent of shopping in the US and 10 per cent in Britain is done over the web.
Software entrepreneur Rod Drury is certain the internet is the future of shopping.
Already, music is downloaded, many hotel bookings are emailed, and Air New Zealand has "reinvented itself" using the web as a retail channel.
But he agrees shopping is a social experience in New Zealand and doubts that will change.
"We have a lot more of the owner-operated stores which are probably a much more interesting shopping experience than the homogeneous stuff that you get in the States. Every mall in the States is exactly the same as the next one.
"So I don't think the internet is necessarily the death-knell of retail because I think retail is more than just buying stuff."
What Mr Drury, a director on Trade Me's advisory board, does see is people increasingly doing their product research over the Net.
Internet shopping is also generating growth in associated areas, such as the courier industry .
"If you've been travelling through the US, you really see this post-code driven commerce, where the post-code becomes a key to all services and these massive logistics facilities growing up alongside airports to facilitate the physical distribution."
This evident even in New Zealand, where NZ Post credits Trade Me with strong growth in parcel mail, while letters are on the decline.
Mr Drury does not think the slow uptake of broadband in New Zealand has held web shopping back in New Zealand.
"I think those that would want to shop and trade over the internet are probably doing it... I suspect a lot of purchasing goes on during the day at work."
But like any retail therapy, internet shoppers can get carried away.
At any one time, there seem to be 20,000 to 60,000 people on Trade Me, indicating that some people are permanently logged in.
Some sneak a look during work hours or even receive text messages when they are outbid.
Psychologist Marc Wilson said that while he knows of no research on internet auction addiction, it is probably like all addictions -- the experience reinforces the behaviour.
"Part of that is the suspense generated by the process -- will I or won't I get in, as the clock ticks down. . .Then, when you are successful, that gives you a rush that backs up the suspense, or your don't get it but you know you'll have a chance next time."
Dr Wilson, the deputy head of Victoria University's school of psychology, says another reason for the popularity of "e-purchasing" is the psychological distance.
"While the payoff isn't immediate (in terms of getting the product), neither is the purchase, particularly if it's by credit card -- after all, that's not real money, is it? It's like buying something and not having to pay for it."
He thinks buying at a store gives shoppers alternative choices and more time to stop and think about their purchases as they hand over cash or a card.
And Dr Wilson has a word of advice for traditional retailers.
"A simple rule would be to do well what internet retailers can't do so easily -- the human touch in quality service."
- NZPA
