Frost & Sullivan: Online Shopping in New Zealand reaches 7% of total retail sales in 2013

~ Market to Reach $6 billion by 2017

AUCKLAND, New Zealand, July 16, 2013 /PRNewswire/ -- The online shopping market in New Zealand continues to grow strongly and in 2013 is forecast to account for 7% of total retail sales. Total online spending will reach NZ$3.65 billion in 2013 and 85% of New Zealand online shoppers expect to increase or at least maintain their online spending over the next 12 months.

These findings were all revealed in Frost & Sullivan's latest research, Australian and New Zealand Online Shopping Market 2013, which is based on a survey of 1,200 online shoppers in both countries. Phil Harpur, Senior Research Manager, Australia & New Zealand ICT Practice, Frost & Sullivan said, "The New Zealand online shopping market is similar to Australia in its level of maturity. Growth has been driven by high penetration of broadband and relatively high levels of mobile phone and smartphone usage. Consumer behaviour patterns are similar to Australia in most facets, with the one exception being a lower propensity to spend on overseas sites."

A greater variety and choice of goods offered from an increasing number of local and international online retailers, particularly in the fashion segment, has contributed significantly towards stimulating retail purchases online by consumers in New Zealand. "Overseas retailers have been actively targeting the New Zealand market over the last couple of years. This has increased the overall level of competition in the local online retail market. Local retail chains have also stepped up their online activity, creating increased awareness amongst consumers and increased media coverage of online shopping," Harpur stated.

"Customers have become more comfortable with the online shopping process, including reduced concerns over security and higher levels of confidence in the delivery process, which helps drive growth in online shopping. 54% of New Zealanders who shop online purchase from overseas sites to some extent and the strength of the New Zealand dollar increases purchasing power of local consumers on overseas sites, and this has also been a strong driver of growth. However, the recent fall in the value of the New Zealand dollar will reduce the attractiveness of shopping on overseas sites," explained Harpur.

Mobile shopping has already seen widespread uptake in New Zealand. The immediacy of mobile devices, having them available anywhere and anytime, gives online retailers significantly more opportunities to engage shoppers with relevant offers when and where they are making buying decisions, encouraging impulse purchasing. 51% of smartphone users have used their smartphone to find a nearby store and 31% have used it to compare prices before shopping for items.

Within the consumer e-commerce market, developing new channels which include mobile commerce (shopping via a mobile device) and social commerce (shopping via a social media site) are growing fast, albeit still relatively small compared to the main fixed line internet channel.

Today's consumers demand and expect omni-channel shopping experiences from retailers, which involves using multiple channels such as online, physical stores, in-store kiosks, social media, product comparison sites, product review sites, general web searches and e-mails. Harpur said, "As the concept of omni-channel retailing grows, online retailing will be regarded as an integral part of the overall shopping experience. By collecting and analysing online data, online retailers can make the online shopping experience personal, strengthening relationships with the customer by delivering customer preferences in real time, which can increase repeat sales. This approach is best manifested by online retailer Amazon."

Harpur finished by saying "As traditional retailers have the ability to implement true omni-channel strategies, this allows them major competitive advantage over online players only. For example, they can make the process of shopping online and picking-up in store work effectively by integrating in-store stock and sales systems to their digital platform or by providing in-store kiosks where consumers can order or purchase online in-store and have purchases delivered to their home at a later date."

Frost & Sullivan's Australian and New Zealand Online Shopping Market 2013 report forms part of the Frost & Sullivan Australian Digital Media program. All research services included in this subscription provide detailed market opportunities and industry trends evaluated following extensive interviews with market participants. Interviews with the press are available. If you are interested in more information on this study, please send an e-mail with your contact details to Donna Jeremiah, Corporate Communications, at [email protected].

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