The e-commerce landscape in New Zealand has increasingly been under international focus due to strong local currency, level of choice in a small economy and unprecedented adoption of online research and shopping.
New Zealand e-commerce represents 6.2 percent of traditional retail and is increasing at three times the rate of traditional sales, according to a recent BNZ Online Retail Sales Index. However, local e-commerce players are losing market share to international operators who hold a 40 percent share in the retail market here.
To compete more effectively, New Zealand retailers need to place e-commerce and mobile commerce at the heart of their marketing strategies.
Mobile is one of the biggest influencers of e-commerce growth. And by 2017 more New Zealanders will be researching and buying on their mobile device than a desktop, according to mobile traffic growth data from StatCounter Global Stats.
Faster connections make it easy to shop. Kiwis on Vodafone’s 4G network shop online nearly twice as much as those on 3G, in part due to the speed of their connection delivering a more acceptable all-round browsing experience. And this begs the question: how many brands still have a presence in the customer’s path to purchase?
E-commerce may only represent between one to ten percent of a retailer’s revenue, so the challenge is to convince senior management that alongside technical and staffing proficiency, a shift in operational mindset and approach is required. It’s not a short-term strategy for short-term wins. It’s an ongoing process of refinement to meet customer expectations and behaviours.
Last December, Vodafone’s online traffic switched to being dominated by mobile. After launching a mobile-optimised site 18 months ago, we were surprised to see the speed at which our customers had switched to mobile.
I believe there are three key areas to focus on to remain relevant and profitable:
- Back to basics approach in creating a mobile-optimised transactional website or app.
- Social presence of your brand and service.
- Performance-based marketing e.g. mobile-optimised electronic direct marketing.
The speed at which consumers and businesses change their purchasing behaviour will be influenced by two key factors: 1) mobile device adoption is rapidly shifting from ‘internet access’ to ‘internet everything’. For example, wearables like smart watches or in-car dashboards. These devices may seem only relevant to early adopters, but the same was said about the iPhone less than four years ago. And 2) mobile-optimised websites, mobile shops and payments are driving the adoption of diverse mobile devices. The key to a great mobile experience is to deliver a seamless way for customers to purchase goods within a small screen. I would argue that usability and simplicity are more important than the online retail campaign itself.
Today, digital has become a tool of influence and a tool of profit—and it’s a race to remain relevant. The biggest concern I have for the New Zealand economy is whether domestic retailers are willing to make the required investment in an increasingly mobile world.
Let me share my own sudden transition to mobile commerce in the last three months. I’m renovating, and made the tough decision to store my beloved iMac and switch to a tablet. As a result, I’ve completely relied on my tablet and mobile to research and buy online.
After eight years of living in New Zealand, I’m still hooked on UK retailers Marks & Spencer and Hobbs for their great choice and amazing deals online. I noticed that these retailers started sending me emails advertising their products and, using data from my previous online purchases, the emails were highly targeted.
In the past I would give up trying to buy via a device as it was just too hard. However, these retailers have optimised mobile sites and by authenticating me, they are delivering a very simple purchase process. Prices are presented in New Zealand dollars, shipping costs vary from $0-$7 and orders take between 3-5 days to arrive.
Given I’m renovating, I’m making lots of purchases—and convenience, price and choice are equally important. I’ve found that fabrics, wallpapers, lights and some furniture are between 50-80 percent cheaper on international sites. For example, a wall mural of New York (my daughter’s choice) cost $60 on www.achica.com, $420 on wallpaperdirect.co.uk and $900 in a Newmarket interior design shop. Of course, I would choose New Zealand retailers to support the economy if they gave me the same choice and price.
Don’t get me wrong, there are some great mobile experiences being delivered in New Zealand. I’m truly impressed with The Warehouse app that launched last month. It allows customers to scan their products—and rivals’ products—to check out the best price. Hoyts, TradeMe, Hell Pizza, BNZ, Xero and many other brands are delivering great mobile experiences. However, these are all larger organisations and it’s the small to medium sized businesses and retailers that are going to lose market share very quickly.
All retailers should embrace e-commerce and if suitable, leapfrog straight into mobile commerce. Not having legacy systems to deal with can sometimes make it much easier. You don’t need a big team of designers and developers but you do need specialist companies to help you. During this period of uncertainty and the limited IP, I would always recommend going to the subject matter experts.
- Geri Ellis is general manager of digital and social media at Vodafone New Zealand. @GE_VodafoneNZ
- This story originally appeared in the May/June edition of NZ Marketing.