Online shopping emerges as the big winner in the first six months of 2020

Wednesday, 5 August 2020

New Zealanders shifted their shopping habits online during lockdown, new data shows.

NZ Post research found that during the first week of level 3, $1 in every $4 spent in New Zealand was online, and even people who traditionally did not shop online much became converts.

The Covid-19 special edition of the NZ Post’s eCommerce Review, The Full Download, examined the shopping habits of Kiwis during the first half of the year.

Online spending for the six months to June 30 was 30 per cent higher than in the same six months last year.

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During that period, the demographics of online shopping shifted.

There was a 71 per cent increase in online shopping from Taranaki, Northland and Gisborne, areas that had traditionally been slower to embrace online shopping, according to the report.

There was also a 62 per cent increase in shoppers over 60 years old. More than 170,000 adult New Zealanders shopped online for the first time during the first six months of 2020.

Massey University marketing professor Jonathan Elms says customers expect smooth interaction between online and in-store shopping.

Restricted supply, GST on international purchases and a focus on buying local increased domestic online sales, the report said.

“While domestic online sales grew by 53 per cent, international sales were down 5 per cent on the same period last year. With the current ‘See NZ. Buy NZ’ sentiment, this is a trend that we expect to see continuing in the months.”

Tuesday remained the most popular shopping day online and over lockdown the numbers showed an evening out of the rest of the week, the report said.

Sundays were New Zealanders’ preferred day for online grocery shopping, driving a big increase in weekend numbers.

Pre-lockdown online weekend spending across all sectors averaged around $9.6m per day but post-lockdown this number rose to around $15.6m per day.

Greg Harford, Retail NZ chief executive, says there has been a massive shift in the retail industry over the last six months.

Professor Jonathan Elms, from Massey University, said Covid-19 had caused a seismic shift in the retail sector.

“We are seeing more and more consumers shopping online for a variety of things, things that they never thought they would shop for ever before,” Elms said.

Online trading had consequences for what customers expected from stores, including around safety, physical distancing and contactless payment.

”Covid has pushed retailers to do business differently. We are in a situation where we are probably six years ahead of where we would have been without Covid. Retailers have had to think about the interaction between their stores and online presence.”

Customers expected flexibility and smooth transitions between shopping online and shopping in a physical store, Elms said.

NZ Retail chief executive Greg Harford said the NZ Post numbers were in line with what he was seeing.

“There has been a systemic shift. A number of people who have never tried before tried during the lockdown and found that they liked it,” Harford said.

“Covid has taken away some of the barriers that we may have seen in the past, and we are still seeing good elevated levels in online shopping.”

But the shift to online has been a “bit of a journey” for the retail sector, Harford said.

“It takes time for businesses to adjust. There is a lot more that can be done, and needs to be done, to make online shopping experience better.”

The key issue for retailers exploring online shopping remained the cost and length of time of freight, he said.