Why Kiwi businesses should switch on to online and how retailers are keeping the cash in the country

New research shows international retailers are chipping away at New Zealand shoppers’ consumer spend, but Kiwi companies finding a way to effectively harness the power of online retailing could add another $34 billion to the economy. And online events like the upcoming Click Monday are doing their bit to get Kiwis spending on local sites.  

This potential upside for the economy will be a reality if low-use internet firms make the passage to become high-use internet companies, says Cate Bryant, executive director of Ecommerce NZ, citing an extensive research study by consulting firm Sapere Research Group.

New Zealand retailers, Bryant says, are missing out on potentially big dollars because 41 percent of online shopping done here disappears overseas. According to data compiled by Nielsen, Kiwis spend around $1.3b annually on overseas retail websites in the US, UK and Australia.

Latest data produced by BNZ shows that domestic retail purchases grew five percent on-year in July while international retailers grew 11 percent during the same period.

Although online shoppers going offshore are driven by range and cost, there is also a level of sophistication missing in New Zealand that is offered by overseas retailers, she adds.

She points to The Iconic, Australia’s online fashion and footwear retailer, which has a stated policy of delivering within three hours, providing an appealing customer value proposition—and which Kiwi e-tailers would do well to emulate.

Using the internet can make a stark difference to a company’s productivity, according to a March 2014 study, ‘The value of internet services to New Zealand businesses’ by the Sapere Research Group.

Internet-savvy companies are on average 73 percent more productive than those who are not, although the average may differ across different industries, the study says.

Those that use the internet for online sales are up to 25 percent more productive than their peers’ in the industry.

Firms that have all or almost all of their staff online are up to 16 percent more productive, while those with a fibre connection are up to 12 percent more productive.

Although New Zealand companies are typically hooked to the internet, most use it for finance functions (90 percent), around 75 percent use the internet for government-linked transactions (GST and other tax processes) and the same percentage use it for procurement of goods and services.

Only 45 percent use the internet to receive online orders in 2012, and most of that was through email; some 11 percent of those surveyed reported that online sales contributed 10 percent or more to total sales; and only 12 percent of the companies surveyed used online payments.

Despite the excitement about online shopping, sales online make up only six percent of total retail sales currently, although they’re growing quickly. The recent Yellow SME Digital Readiness survey showed 50 percent of Kiwi SMEs don’t have a website. 

Retailers that want to experience the power of many using the internet will come together on Click Monday to drive online sales within New Zealand. 

“Click Monday holds NZ’s biggest online sales days, based on the legendary Cyber Monday event out of the US.  Clickmonday.co.nz is a centralized site that showcases brands and offers from New Zealand retailers across many categories. Users find an offer on site and then click through to the retailer’s site to make their purchase,” says Bryant, who is the spokesperson for the organisation.

Click Monday was first introduced last year, bringing together 84 retailers who experienced collectively over 300,000 clicks on their online stores, generating $2.5m of sales in one day, she says. 

“This was an uplift of four to ten times for retailers involved.”

Click Monday will be held on Sept 15 and Nov 24. Bryant says many large retailers have already signed up for both events and new retailers are signing up every day. Radio and online advertising kicked off last week, with consumers encouraged to sign up with a cash draw.

“This year we expect our consumer database to double from an already significant base,” says Bryant.  

This year Bryant has partnered with Retail NZ, which is now working closely with Ecommerce NZ, and New Zealand Post to support the event. Retail NZ has helped market the event to its members while New Zealand Post has come to the party with a 20 percent discount offer tailored to SMEs using its online ParcelRewards loyalty scheme for delivery products and services paid for online.  

The Warehouse Group held its own event called Click Madness last year, which led to a sales uplift that chief executive Mark Powell said was similar to that seen on Boxing Day

Internationally, events like Click Monday have become highly significant retail events. 

“In China last year, a similar event delivered more than US$5.75b of sales. Click Monday is here to grow sales for New Zealand retailers online, and we hope that by raising the profile of online shopping, more local businesses will see the opportunities that lie beyond New Zealand’s borders as well,” Bryant says.

And, of course, another benefit of these online shopping events is that, compared to their physical counterparts like Black Friday, which often seem to send consumers into a unfathomable frenzy, there’s generally much less stampeding, fighting and tasering involved. 

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