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Online retail on the up and up

Online retail on the up and up
Nearly two million New Zealanders over the age 15 are expected to shop online and spend an average of $1,659 in 2012.

Nearly two million New Zealanders over the age 15 are expected to shop online and spend an average of $1,659 in 2012.

That's according to the new Australian and New Zealand Online Shopping survey released by PwC and Frost & Sullivan yesterday, which predicts online shopping in New Zealand will increase to $3.19 billion in 2012, and grow to $5.37 billion by 2016.

It paints a similar picture to the latest Roy Morgan Single Source data, out this week, which showed 51 percent of Kiwis aged 14-plus now do ‘buying, selling, or shopping’ activities online in an average four-week period – up from 30 percent two years ago.

PwC partner and retail industry spokesperson Julian Prior warns that retailers need to be innovative to capture shoppers’ cash.

“It’s all about having the ability to access the best price on offer, while perusing a greater and wider product range," he said.

"In the absence of any real economic growth retailers need to be innovative and capture the opportunities that online presents. Failure to do so, will see more and more shoppers’ cash head overseas."

Currently, international websites count for 35 percent of New Zealand online shopping and that is expected to grow.

“Local retailers can compete with international websites through understanding what their customers want, how they want to buy it and generating high customer loyalty through a positive retail experience.”

Online retail sales now make up 5.9 percent of New Zealand retail sales, up from 5.1 percent in 2011 and comparable with Australia’s 6.3 percent. According to the survey, the most popular online purchases are electrical items, clothing and books. The biggest jump has been in food and groceries, now purchased online by 21 percent of shoppers.

Online expenditure in New Zealand has grown by 19 percent in the past year, and is expected to grow by more than 14 percent per annum over the next four years.

The survey says this is stimulated by consumers seeking greater value and greater variety, the continued strength of the New Zealand dollar, proliferation of group buying sites, use of social media by both consumers and retailers to drive brand awareness and widespread usage of mobile devices.

More than a third of online purchases are now made on mobile and smartphones, and 12 percent on tablets.

From the report: "Over the past year, online shopping has received significant mainstream media attention, particularly with regard to substantially lower pricing from international retailers representing a threat to local multi channel retailers. This has undoubtedly raised consumer awareness about online shopping locally and overseas. Retailers are also now giving more prominence to online channels through various marketing efforts, which is also likely to be contributing to consumer awareness and uptake."