Online shopping ballooned by $1.2 billion last year, most with domestic retailers

Thursday, 11 February 2021

Spending online was up more than $1.2 billion last year to a total of $5.8b compared to 2019, according to New Zealand Post’s e-commerce report.

In December, online spending increased $538 million, up 17 per cent on a year before.

Even before the Covid-19 pandemic hit, online shopping was up 10 per cent in the first two months of last year, the report says.

First Retail Group chief executive Chris Wilkinson said the country has probably seen a permanent shift in how shopping was done.

New Zealand Post delivered 200 parcels a minute in the week before Christmas as the popularity of online shopping increased.

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“More and more shopping journeys are starting online, where they end depends on how savvy the retailer is.”

More than 2.17 million people, or 53 per cent of the population, shopped online, the report says.

Of these, 305 000 were new online shoppers.

The strongest growth was among the over-60 age group, with a 30 per cent rise in spending.

The biggest online shopping months spending were May, during the lockdown (more than $600m), and November ($584m), which included Black Friday.

NZ Post delivered more than 200 parcels as minute, or 2.1 million parcels in the week before Christmas Day, the report says.

First Retail Group managing director Chris Wilkinson says there has been a permanent shift to online shopping in New Zealand.

“What we saw in 2020 is, in many cases, people who had never shopped online before were forced online through groceries,” Wilkinson said.

“They became familiar with the platform, and they have, in many cases, stayed loyal to the businesses they discovered online after lockdown ended.”

Lockdown broke the ice for many consumers which has since been sustained, he said.

Many retailers benefited from the fact that they were already working on their online strategy before the global pandemic, he said.

Auckland University of Technology marketing expert Sommer Kapitan says online shopping has become the norm.

“They knew, with the likes of Amazon coming into the market, they needed to be prepared for what was coming.”

Hallensteins and Glassons, for example, built an online fulfilment centre in 2018 and was able to shift sales to online quickly, he said.

Shoppers also did more of their spending at domestic retailers, making up 71 per cent of the total.

But businesses that did not have an online store missed out, he said.

Auckland University of Technology marketing expert Sommer Kapitan said online shopping had been on the rise over the last decade.

“Behaviour change models show that once you have done it once, the more you are willing to do it again,” she said.

Social trends influenced shoppers as well, she said.

A lot of factors, including availability of products and online security had to line up to make online shopping widely acceptable, she said.

“Now that it has become so easy, online shopping has become more of the norm. If you can order your toilet paper online, the world has changed.”

Shopping at the mall was going to become more about the experience, she said.

There were some fishhooks to online shopping, she said.

“When you physically put something in the cart, and think about it a little bit longer, it at least makes you think a lot more of what you are spending and how,” she said.

“The further we are from the process of counting out bills, the easier it is to spend our money and that is an actual risk to online shopping.”