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NZ online shopping to increase to $2.68 billion in 2011
A report, published by PwC and Frost & Sullivan, says that Kiwi online shopping is set to increase to NZ$2.68 billion in 2011 – an increase of 12 per cent from 2010 – and will account for 5.1 per cent of all retail sales in the country. Of this total amount, an estimated $910 million or 34 per cent will be spent with offshore retailers.
The figures put New Zealand on a par with Australia, but still behind markets such as the USA and UK, where online now accounts for 7.5% and 9% respectively of retail sales.
Frost & Sullivan senior research manager Phil Harpur says that “online shopping, both locally and offshore, is expected to show strong growth over the next four years, reaching $4.22 billion by 2015. This represents a compound annual growth rate (CAGR) of around 12 per cent.”
According to PwC’s Global Retail & Consumer Advisory Leader, Stuart Harker, “large and small retailers alike are facing stronger than ever competition from digital channels, both here and overseas. Lower prices, convenience, greater product range and a growth in mobile devices are all factors fuelling online shopping.”
Over the next 12 months, 82 per cent of online shoppers surveyed indicated they would increase or at least maintain their current level of online expenditure. More than one third (38 per cent) of participants stated they were using smartphone or mobile devices such as tablets to buy products online.
“Mobile shopping has been one of the key drivers of online retail sales in the last 12 months and will continue to drive sales in the next year as new products are introduced into the market,” Mr Harker says.
The report also notes that group buying sites are also becoming increasingly popular in New Zealand, with over 40% of online shoppers having used a group buying site in the previous 12 months PwC New Zealand Retail Partner Julian Prior says digital channels are changing the way New Zealanders shop and creating both challenges and opportunities for retailers.
“The attraction of lower prices, convenience and broader product ranges is swelling the ranks of consumers choosing to shop online both locally and on international websites.
“New Zealand's retailers are now competing on the global stage and need to embrace the fundamental shift in underlying business models caused by the digital revolution.
“The general lack of an online presence by the large retail chains in New Zealand and in Australia over the last decade has been a significant factor for a relatively poor uptake of online shopping within this region,” Mr Prior says.
“Engaging and retaining customers in the digital era requires a rethink of the role of the store and importantly how retailers engage with their current and target customers.
“Because customers can buy anything they want any time on any device, the store becomes more about brand and customer engagement, merchandise and the overall store experience.
“Retailers that are able to engage customers through multiple channels will build a deeper relationship than through a single traditional store channel,” Mr Prior says.
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