Retailers must innovate to survive

Online shopping 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;

1.9 million Kiwis aged over 15 are expected to shop online and spend an average of $1,659 in 2012; and international websites account for 35 percent of New Zealand online shopping and is expected to grow.

These are some of the key findings revealed in the Australian and New Zealand Online Shopping survey released by PwC and Frost & Sullivan recently. 

The report says online shopping in New Zealand will increase to NZ$3.19 billion in 2012, and is predicted to grow to $5.37 billion by 2016. 

“The research shows online is now ‘mainstream’ for shoppers as they hunt for the perfect purchase. It’s all about having the ability to access the best price on offer, while perusing a greater and wider product range,” says PwC partner and retail industry spokesperson Julian Prior.

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. The most popular online purchases are electrical items, clothing and books. The biggest jump has been food and groceries, now purchased online by 21 percent of shoppers. 

The report also found growth in online shopping is being driven by evolving digital tools and increasingly sophisticated and connected shoppers, who have high expectations of the retail experience. Over 36 percent of online purchases are now made on mobile and smartphones, and 12 percent on tablet devices, which is expected to drive continued growth in online shopping.

“Retailing today is more than selling from a bricks and mortar shop, although we shouldn’t expect our High Street stores to disappear as the physical store will continue to play an important part of the shopping experience,” says Prior. “It is encouraging to see retailers are now beginning to embrace online retailing. 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.”