Kiwi retailers losing online race, but there's room for a comeback

  • Retail
  • November 26, 2013
  • Amanda Sachtleben
Kiwi retailers losing online race, but there's room for a comeback

Although the majority of Kiwis are still buying from locally-based web sellers, international merchants are outpacing their Kiwi counterparts in attracting New Zealand buyers. But that doesn't mean we can't fight back, the Interactive Advertising Bureau of New Zealand says.

Seventy-seven percent of of the Kiwis surveyed in the IAB's latest snapshot had used a New Zealand site to buy a product in the past four weeks. However, it cited BNZ's Online Retail Sales Index which showed online purchases from domestic retailers had fallen to 57 percent this year from 66 percent in 2009. That compared with a rise over that period from 34 percent to 43 percent for international merchants.

That should be cause for concern among our online retailers, says IABNZ local general manager Alissa Higgins.

"It comes down to volume. When you look at what's happening in China because of the population, like bicycle couriers and GPS so people can contact the courier if they're not home and ask the courier to hang ten, that's purely done because of the population size. That's a huge concern when you look at countries like New Zealand that don't have that density."

But tactics like click to collect, where customers can buy online then collect the product from their local store instead of having to wait for delivery, will be a source of competitive advantage, Higgins says.

She adds after sales service can also be boon. Kiwi retailers without an online presence have a big opportunity, even if they don't offer e-commerce, she says. That's because of the ROBO effect: research online, buy later, becoming more pronounced with the shift to mobile devices.

IAB's research showed a growing number of Kiwis are making the most of 'showrooming', using mobile devices to compare prices.

Mobile devices were a growing force in online shopping, with 24 percent of those surveyed using them to research prices, and the same percentage using them for 'lean back commerce': browsing their mobiles at home to look for products.

Twenty-nine percent were using mobiles to locate retail stores. IABNZ also said tablets were the new equivalent of the catalogue, with 18 percent using mobile devices to buy products.

Another piece of local research, this time by Colmar Brunton, showed the growing trend towards shopping using mobile devices.

Its survey of 1024 online Kiwis in September showed the largest numbers of tablet owners used their devices for browsing products (64 percent), comparing prices (55 percent), banking (55 percent), comparing products (50 percent) and purchasing products (49 percent). Smartphones were popular for banking (47 percent) browsing products (41 percent) and comparing prices (46 percent) while just over a quarter of owners used them for purchasing.

Colmar Brunton innovation and development director Vanessa Clark says shopping apps and websites are popular among mobile shoppers but the majority need to be familiar with a brand or store before they'll download an app or use a shopping website.

She says that's an opportunity for retailers to strengthen their relationship with customers, particularly those they already have in their customer database, through offering an app.

“We know from previous surveys that trust is critical for brand success and this is still essential in mobile shopping,” she says. “The bottom line is if you want to get mobile shoppers to respond to an app and come back to it, it’s all about making it easy to use. This is particularly important for smartphones where screen space can be limited.”

Almost 60 percent of the mobile shoppers Colmar Brunton canvassed had undertaken showrooming.

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