New Zealand retailers appear to be gaining ground on international eCommerce giants like Amazon, new shopping figures show.
The amount Kiwis spent online with local retailers jumped by 19 per cent last year, outstripping a growth of 10 per cent in purchases from international-based retailers.
The figures, among key findings in NZ Post's 2019 eCommerce report The Full Download, also show that total online shopping grew by 16 per cent last year - compared to just 2 per cent for traditional bricks and mortar stores - and now represents 9 per cent of all retail spending.
NZ Post's GM business marketing Chris Wong says the figures show New Zealand retailers "have been able to lift their game" against overseas competition and show how quickly the retail market is changing.
Growth in international online spending slowed significantly in 2018, dropping to 10 per cent from the 23 per cent increase it achieved in 2017. At the same time the number of online transactions went from a rise of 37 per cent in 2017 to just a 6 per cent lift last year.
"It means more dollars are being kept in New Zealand and more success is being created for New Zealand retailers," he says. "Although shoppers are choosing international for price, they are buying locally to not only support New Zealand businesses but also because they trust them – and this is good news.
"We believe online buying will continue to grow and although I expect physical retail will remain a dominant part of the Kiwi shopping experience, I can see online getting to double digits as a percentage of overall spending."
Wong says the report, which was commissioned by NZ Post in partnership with Datamine using annonymised card transactions, shows up to 1.8 million Kiwis spent $4.2 billion in online purchases of physical goods in 2018, four per cent more than in 2017, while the average yearly online spend per customer hit $2228 – with the top 9 per cent of online shoppers spending $8895 a year.
But not only are New Zealanders spending more online many are doing so more often, with 44 per cent of online shoppers purchasing more than once a month and hitting the "buy" button an average of 22 times a year.
Overall the growth in online shopping was largely driven by existing shoppers increasing the frequency of their purchases with most growth occurring among people aged under 30, 40 per cent of this group now shopping online, up from 27 per cent in 2017.
"While the under 30s were the standout shoppers in terms of growth, let's not forget the real money is still held by the 30 – 60 age group," the report says. "They continue to dominate the online shopper base."
Women aged 30 to 45 in rural communities are also among the highest users of online, the lack of proximity to a good selection of stores meaning they are hungry for choice and lower prices.
Wong says Kiwis are also spending more online on special event days popular overseas like Black Friday and Cyber Monday than they do on Boxing Day – Paymark data showing spending at non-food retail stores on Black Friday alone topping $69 million, a 20.3 per cent increase on 2017.
More than a third of all online shoppers are embracing these shopping events which, the report says, are here to stay (both are held in November, Black Friday on the day after the US Thanksgiving holiday, Cyber Monday on the Monday following Thanksgiving).
Another international shopping event which is massive internationally and has the potential to be another big shopping event here is Singles Day. A Chinese initiative held every November 11 it began as an anti-Valentine's Day in the 1990s when students at Nanjing University started celebrating their single status.
"The learning here is these events need to be built into marketing plans and given even more weight than Boxing Day," the report says. "They can provide a great opportunity for e tailers to capitalise on pre-Christmas sales."
The report also shows 228,000 Kiwis have signed up to Buy Now Pay Later (BNPL) schemes like AfterPay, which Wong believes has had a big effect on online shopping.
Buyers using this method now represent 12 per cent of all online shoppers and up to 70 per cent of BNPL purchases are made by females, 61 per cent of whom are millennials.
The schemes work by allowing customers to spread payments over weekly or fortnightly payments with no interest: "It is a very appealing proposition, particularly for millennials as it fits in with their generation's ethos of wanting everything now," the report says.
"The desire to spend, and the removal of spending barriers, makes purchases very tempting particularly in the clothing and footwear and health and beauty sectors."
Wong says NZ Post delivers more online shopping parcels than any other company in New Zealand, in November/December alone last year couriering 14.5 million parcels.
The report can be downloaded at: https://thefulldownload.co.nz/