Locals hurt by online trend

More Northlanders shopping online means retailers are being hit hard. Photo / File

More Northlanders are buying online - making it even harder for local shops to compete with the "Warehouse mentality", one retailer says.

The BNZ Marketview report for December showed a small increase in online shopping from December 2013 by Northland residents. Spending on domestic sites was down 7.9 per cent, while spending on overseas sites was up by 33.7 per cent.

Crafty or Wot co-owner Steve Hart said cheaper online options were driving people even further away from local products.

"Without a doubt, people still prefer to see products before they buy them but price is really important, so they will go online if it means going cheaper," he said. "People don't appreciate value any more. That's a generalisation, of course, but the 'Warehouse mentality' has meant people want low prices rather than quality."

Mr Hart and his wife have been running the store at their Pakaraka farm for four years and have been online in various forms for longer than that.

Generally, people who bought their products online were not first-time customers, he said.

"People might buy one or two items at our store or the market and then decide they really like them, so go home and buy more online."

Marketview managing director Stephen Bridle said it was interesting to see New Zealanders living outside of metro areas embracing online spending on overseas sites.

"The growth in e-commerce internationally has started putting 5th Ave and Oxford St into the living rooms and kitchens of provincial New Zealand households - and they seem to love it," he said.

Nationally, online spending was up 12 per cent from December 2013.

At domestic merchants, online spending increased 7 per cent year-on-year. BNZ institutional research director Gary Baker said it was a strong result for December, as online spending had been growing at only 3 or 4 per cent per annum for most of the year .

Kiwis also spent 19 per cent more on overseas sites than the year prior, despite the New Zealand dollar being down a further 6 per cent against the US dollar than in December 2013.

Food and entertainment goods were the standout categories for online spending growth, with increases of more than 20 per cent from December 2013, the report found.

On domestic sites, spending on "newspapers and books" and "computers and peripherals" was also strong - up 18 per cent and 21 per cent respectively, while spending on clothing increased by 19 per cent on overseas sites.

"This year we have seen a shift in the timing of online purchases, with an increase in the percentage of domestic online transactions completed in the three days just prior to Christmas," Mr Baker said.

"A few delayed transactions aside, it seems to us this is an indication of consumers' growing confidence in shopping online, and their willingness to wait for those best, last minute deals.

"It also points to the efficiency of New Zealand e-tailers' supply chains. If consumers know they will get reliable service, it can only help to increase online purchase levels." Spending at physical stores was up by about 4 per cent on December 2013.