Category Archives: New Zealand

Nearly Half of Kiwis Now Shop Online

Earlier this month, Roy Morgan Research released some of the online shopping data from its Single Source New Zealand, July 2014 – June 2015 research study.

According to that research, just under half (49.3%) of New Zealanders 14+ (1.8 million of us) bought at least one product over the internet in the previous four weeks.

9.0% of Kiwis now buy travel products such as tickets or accommodation online in an average four-week period, making it the most common internet purchase ahead of women’s clothing (7.9%), tickets to shows, movies or events (6.1%) and fast food/delivered meals (6.1%).

Other popular online purchases include Books (5.0%) and eBooks (4.1%), music downloads (4.7%), and men’s clothing (4.0%)—with around half the number of online buyers as womenswear.

Top 20 products Kiwis buy online

NZ online shopping

John La Rosa, General Manager Client Services – ANZ Roy Morgan Research, commented at the time:

“It’s clear that many of the most common online sales are for non-physical items like tickets, bookings, home delivery, and downloads—that is, products with no shipping or that don’t need to be tried on or tested in a bricks-and-mortar store. For many, the internet is now the default channel for buying a travel or movie ticket, booking a hotel room, or ordering a pizza.

“Other commonly purchased items such as clothes, books and cosmetics are items that we know are identical whether bought online or in a store, so it may come down to price and convenience.

“But other products ranging from small electrical goods, sports equipment and homewares to computers, jewellery and hardware, are also gaining in the online space. It’s important that traditional retailers stop viewing online as a threat, and instead as an opportunity to reach and appeal to customers in different ways. Today’s consumers aren’t thinking in terms of online or offline—to them, it’s all just shopping. Retailers therefore need an ‘omni-channel’ view of their offerings, competition, pricing, service and advertising.

“Around two-thirds of internet shoppers agree they only buy from online retailers they know—whether that’s trustworthy online-only outlets or the websites of bricks-and-mortar shops. Around 1 in 5 say they only buy from New Zealand online stores.

“Also, the internet isn’t just a sales channel; it’s often the way we do a bit of pre-purchase planning via computer, mobile or tablet instead of visiting stores. Almost half of Kiwis agree they research products or services online before buying in-store, and almost 1 in 3 did product research online within the last four weeks.”

The study is based on a sample of 5983 New Zealanders 14+ and was conducted over the 12 months to June 2015.

Online Shopping Continues To Grow, But …

The latest BNZ Online Retail Sales Index (covering the 12 months till the end of February 2014), shows continued growth in online shopping – but with Kiwis continuing to buy more and more from international stores.


  • 42% of NZ online retail purchases in February were from international merchants
  • Online purchases at offshore merchants were 21% higher than in February 2013
  • Online purchases at domestic sites were just 6% higher than in February 2013

Here’s how the sector has been trending over the last five years:ecom-feb2014

The BNZ report also drills down into exactly which product categories are being purchased from international sites:


No great surprise to see that Furniture is predominantly purchased from Kiwi suppliers: international freight costs for large items remain a significant barrier.

The BNZ reports that:

At domestic merchants, online sales in February were up strongly for Supermarket & Groceries, Other Specialised Food, Department Stores, and Pharmaceuticals & Cosmetics.

[However] domestic online sales of Clothing, Liquor, Electrical Appliances, and sales at specialist Daily Sales sites, were all softer than in February last year.

Why are domestic online retail sales lagging behind?

Yes, relative product costs can be a significant factor — internationally-sourced items offered locally can include margins for the importer, distributer and the retailer, resulting in substantial premiums for “buying locally”. However, as recent research by Sapere (“The value of internet services to New Zealand businesses“, March 2014) suggests, another key factor is local retailers’ reluctance to embrace online sales:

In retail, all our respondents with an online store said it was their fastest growing channel, but (apart from the online-only operators) online was still a small minority of sales. One major chain thought that, despite extensive effort and very large investments, they were still only 1-2% of the way towards the frontier of what was possible.

One service provider suggested that no more than 1 in 12 of New Zealand retailers were really doing a good job of integrating online and offline stores. “The others are just online by default or because they think they have to be, but it is costing them a lot, and it brings new hassles, they have to do it all themselves, and they are not sure whether it will work at all”

Sapere continues:

Retailers are experimenting online but there is still much to do. Internet services are seen as important and effective for marketing and, for a small but growing number of firms, for sales. The competitive impacts of total price transparency enabled by online shopping and competition from online and overseas retailers are evident for retailers operating in some categories. We estimate that a retailer making more extensive use of Internet services is 7% more productive than the average retailer.

The Sapere report included a number of interviews with NZ retailers, sharing their perspective on online retail:

One interviewee said that she foresaw a gloomy future for retailers selling goods exposed to overseas online competition who did not have a strong brand or a point of difference. Bearing this out perhaps, we spoke to a jewellery retailer with a strong point of difference who saw no threat from the Internet. For that business the website and social media were channels for branding and advertising, and a useful addition to the print plus word of mouth model that had prevailed for a long time as the way to get work.

It was not clear in general in what circumstances online retail would add to total sales, whether it would just take share from another competitor or from the offline store, or whether it was additive to sales overall. Some interviewees said that they were just pursuing every angle that they could that might generate more business, and expanding on the things that seemed to work. One interviewee took the view that online sales were not additive at all at the sectoral level, i.e., it was just boosting competition and shifting sales between competitors.

One larger clothing retailer told us that an integrated online/offline/telesales strategy was working, but that it had taken a long time to figure out how to get the different elements to work together rather than competing with each other. This interviewee also said that having an offline store in an area helps to boost online sales in that area: perhaps customers are more confident to shop online if they know that there is an offline store as well.

Another large chain told us that its online store had a clear, material and positive impact on total sales, that customers spent more online than in store, and that this was because the online environment could better meet customer needs, rather than just diverting business from competitors.

One retail service provider was cautiously optimistic about the overall impact of the Internet on retail. “Online is certainly taking away instore sales to some extent, but it is also an opportunity to capture customers who are browsing online. Comparison shopping is now so easy, consumers are price conscious and better informed, but they are willing to purchase online or come in store if they find what they want and they know that you have it.”


Succeeding in Online Retail

All this research leads us to conclude that if the only thing that differentiates you from other retailers selling the same products is your geographic location (eg yours is the only shop in Gore selling these products), you’re going to fail at online retail.

Conversely (and we first made this point in 2005, in our book “Trade Me Success Secrets“), your best opportunity lies in offering unique, personalised items with a high perceived value, so that you’re effectively providing both uniqueness and a great deal.

What was true for Trade Me in 2005 (competing with thousands of other Kiwi sellers) is even more relevant in 2014, when you’re competing with millions of other sellers from around the world.

Location matters — but only if:

  • you know what your local/regional/national customers really want, and give it to them through your customised products and services
  • your delivery times are quicker as a result of being close to your customer
  • your delivery costs are also lower as a result (did you know that free shipping is more attractive than a discount in most cases?)

If you’d like to know more about online retail for New Zealand businesses, check out our Mastering eCommerce course

Click Monday and NZ Online Shopping

Today is Click Monday, the latest attempt to transplant the U.S. notion of CyberMonday to New Zealand soil. As Trade Me’s Mike O’Donnell observed in a recent Stuff column:

This year has seen the [CyberMonday] concept reach New Zealand. Several times over. Three different organisations are having a go at creating a Cyber Monday-like event, and there’s even rumour of a fourth.

The first was held [at the beginning of November] by Nzsale, an Australian-owned member-only online shopping club. Held a good three weeks prior to Thanksgiving weekend, Nzsale staged a “Flash Frenzy“, and billed it optimistically as the biggest online event ever.

The next event to be announced [went] live on 12 November … “Click Madness” is backed by The Warehouse Group and involves special deals from The Warehouse, Noel Leeming, Warehouse Stationery, and

The event closest to actual Thanksgiving in the United States is “Click Monday“, being run by Auckland ecommerce consultant Cate Bryant and Alain Russel of Blackpepper fame.

Click Monday has successfully involved a swathe of big names in the event including Bendon, Icebreaker, Briscoes and Hallensteins. It goes live for 24 hours, starting at 7pm on November 25.

The reason for this flood of Kiwi CyberMonday lookalikes can be summed up in one word: ClickFrenzy. This Australian online shopping event, launched with a bang in 2012, attracted a whole lot of headlines across the ditch last year, not always for the right reasons (the ClickFrenzy website, was down for several hours because of unprecedented traffic volumes, with reportedly 5% of the Australian population, some 2 million users, landing on the Click Frenzy site in the first few minutes):

Perhaps the most serious consumer complaint was simply that the deals on offer didn’t live up to the hype:

  • Following the launch of Click Frenzy, consumers immediately began comparing the ‘deals’ to local and international offers, highlighting the lack of value from some of the ClickFrenzy offers via Facebook. One example is Jamie Olivers 15-minute meals book, on sale for $26.95 via the Click Frenzy site. Customers were quick to respond calling out that the same book is available for less elsewhere (~$15 from the UK and under $25 at BigW and K-mart at a non-sale price). [PWC Digital Pulse]

Despite the negativity, Click Frenzy was repeated in Australia this year (last week), with rather more impressive results reported, including:

  • Online fashion retailer The Iconic smashed previous sales records achieving its first $1m dollar day and doubling sales from last year. It counted more than 200,000 visits during the 24-hour flash sale. (AdNews)
  • [IBM Digital Analytics Benchmark data] showed retail sales were up 16.3 per cent throughout Click Frenzy, which ran for 24 hours from 7pm, Tuesday 19 November 2013, compared to the same period last year. This is despite the fact preliminary figures of 1,061,000 visitors were slightly short of last year’s 1.6 million. (Retailbiz)
  • Traffic spikes during the 24 hour shopathon occurred around 9:30pm and 11:30am as people piled in after dinner, and again during mid-morning breaks. And they were looking for bargains: The average basket spend was down 4% from last year at $131.13. (AdNews)

By all accounts, one of the biggest problems with this year’s ClickFrenzy event was Ambush Marketing, with non-participating retailers attempting to climb on the bandwagon without paying for the privilege:

  • Dick Smith gatecrashes the online sale with Deal Frenzy, JB HiFi has Early Bird Xmas Frenzy, while Kogan is just always in a frenzy. (Channel News)
  • has been issued with a cease-and-desist letter after it hosted a Click Frenzy sale despite not being part of the official event. (Smart Company)

We’re already seeing similar ambushing in New Zealand. For example, even though the Warehouse Group‘s Click Madness event is officially over, there are still deals to be had when one searches for Click Monday:

Similarly, PBTech is serving up CyberMonday Sale advertising to accompany stories about online shopping, with its event starting one hour earlier:

Australian commentator Myles Harris offered up these key learnings from last year’s Click Frenzy:

  • That many Australian E-Tailers are under resourced and did not comprehend the amount of traffic a good deal online can bring.
  • That many Australian retailers view online as an avenue of selling surplus stock. There were a lot of complaints last night that selection was limited and that the store treated it as a dumping ground.
  • Many Australian retailers are not on the ball with online communication streams. Many who were part of Click Frenzy were not active on their Facebook pages or on twitter. Customers certainly loved those who were and directed them to the correct site without having to go through the Click Frenzy site.
  • That if the price is right the people will come. For far too long retail and some Aussie e-tail have not offered any incentive to buy online price wise. The deals are often not good enough or it’s the same price that is in the bricks and mortar stores. While this is an understandable tactic, it certainly does not attract the majority of online shoppers who shop on a global level.

As Click Monday prepares to launch in New Zealand, we wish the organisers well and trust that they and their participating retailers have learned these key lessons from our trans-Tasman neighbours.

New Zealand eCommerce Statistics 2013 [Infographic]

Because infographics are so popular, we’ve put together this collection of New Zealand 2013 eCommerce statistics.

In one handy place, you’ll find:

  • How many NZ web users made at least one purchase online in 2012
  • How many New Zealanders now shop online, by age group
  • How much money will be spent online by Kiwis in 2013 and how much they’re expected to spend by 2016
  • How many Kiwis shop online by mobile and by tablet
  • What NZ Internet shoppers buy online, by category
  • How much NZ Internet shoppers spend in a typical month

The data comes from:

  • Statistics New Zealand Household Use of Information and Communication Technology 2012
  • Julian Prior, PwC interview:
  • The Nielsen Company, New Zealand 2012 The Year That Was
  • Roy Morgan Research, State Of The Nation, March 2013 [the graphic from this research comes from the NZ Herald story reporting the results]

If you’d like a copy of this infographic in full size (A4 width), email us at info (at) eCommerce (dot) org (dot) nz.

Latest New Zealand eCommerce Statistics

Statistics New Zealand has just released the latest Online Shopping figures from the Household Use of Information and Communication Technology report for 2012 — and they make fascinating reading.

Key points:


Yes, 54% of New Zealand’s 2.8 million Internet users (those aged 15 plus who went online in the last twelve months) shopped online and made at least one purchase in 2012.

If we look at individual age groups, those numbers go way up:


Typical online shopping expenditure ranges from twenty to five hundred dollars in a typical month (with a small percentage who spend a lot more):


As Statistics New Zealand notes:

It also seems that what we’re buying is changing. We’re not necessarily buying tangible items; over half of those who shopped online had at least one item delivered electronically. This may include items such as e-books, music, or e-tickets.

Looking at those who had made a purchase in the four weeks before the survey, women outnumbered men in spending a total value of up to $500, while the more expensive purchases predominantly belonged to men.

The number of people spending a total of over $2,000 online has doubled since [the previous survey, i] 2009, to reach 44,000 people in a four-week period.

If you are one of those who aren’t yet offering ecommerce on your website, NOW would be a good time to start. Check out our Mastering eCommerce course.

Click Wraps, Browse Wraps & Bad Raps

Have just read Mike O’Donnell’s latest column, and wanted to share it with you because it makes essential reading for Kiwi eCommerce operators.

Here are the most relevant points:

Broadly speaking there are two kinds of user agreements or “wraps” on eCommerce websites. One is a “click wrap” where you are presented with the terms and conditions and have to click “I agree” before proceeding.

This other is a “browse wrap” where terms and conditions are viewable on the site but your ongoing use of the site supposedly means you have agreed to them. Browse wraps do not require users to click on an “I agree” button, but assume that simply using the site signifies acceptance.

Late last year the US District Court found that eCommerce giant Zappos’ user agreement did not protect the company (or owner Amazon) from a class action brought by its customers. In fact the US Court went further than that.

First, it found the “browse wrap” style of agreement under which customers buy stuff on Zappos had no ability to bind those customers to its terms and conditions.

Second, it found a provision in Zappos’ user agreement saying it had the right to change the terms and conditions at any time (without bringing those changes to the attention of customers) was likely to be useless. The District Court called such a clause “illusory” and suggested it was unfair and likely voided an underlying arbitration clause.

Mike’s article goes on to point out that New Zealand’s own Consumer Law Reform Bill is trudging its way into the statute books, and amongst the many implications of that impending legislation are that

… the Bill prohibits businesses from having ‘unfair contract terms’ in their standard term contracts with customers … [such as] terms that allow only one party to limit performance of a contract, vary the terms, or change the price without notice.

If your ecommerce business is typical, it may well have boilerplate ‘Terms & Conditions’ that seem to reserve your right to do anything you want (without bothering to notify customers). The cruelly-exposed reality is that such T&Cs already probably mean nothing (and will mean even less in the future).

Your recommended solution? Go read the full column.