What the online shopping boom means for traditional retailers

Online shoppingThe original healine for this article was “Online shopping to boom in 2012”. Written early that year, I predicted that the growth of online shopping would continue to be significant and went so far and to say that if you’re a traditional retailer but don’t add value, do something no one else does, or sell something no one else can, you may as well close down now. Many retailers who didn’t adapt, ended up doing just that.

The online shopping landscape in New Zealand has changed significantly over the last 10 years. In 2013, Kiwis bought online goods worth NZ$3.65 billion, a figure that was expected to double by 2017. A decade later, in 2022, Kiwis spent more than NZ$2.2 billion on physical goods online in the first quarter alone. Online shopping in New Zealand now makes up almost 14 percent of the country’s entire retail sales.

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Boom factors

While many believe that Covid and the imposed lockdowns were the main drivers behind the latest boom in online shopping, there are plenty of other factors to consider. The pandemic did lead to an increase in online sales mainly throughout 2020 and leading into 2021, when the fear of the new virus kept many people from interacting socially and seeking the safety and comfort of their own homes.

Despite the majority of people adapting to a life with Covid around, online shopping continues to increase steadily. This is mostly due to additional features that many retailers have added to make the experience for their online shoppers more pleasant, convenient and affordable.

Payment Convenience

Online retailers are now offering their customers multiple payment options to suit a range of budgets. In addition to credit and debit card payments, shoppers can now also pay via bank transfer and choose from different buy-now-py-later providers. These measures have opened up new shopping opportunities for people from different financial and socio-economic backgrounds.

Free delivery options

The introduction of free delivery has also drawn more people to shop online. Not only does it increase customer satisfaction by taking away the cost of shipping. It has also encouraged people to spend more on one order to qualify for this feature, resulting in higher sales volumes.

Competitive Pricing

Ecommerce not only allows customers to search for products online and compare them. Online retailers are also often beating the prices of physical stores and boutique shops from around the corner. Furthermore, exclusive online sales and promotional events make online shopping even more attractive to bargain hunters and consumers who are on a budget.

Improved Product Range

Without the limitations of physical space, online retailers often have a much broader product range than brick-and-mortar stores could ever offer. The greater variety and product choices mean that ecommerce stores can cater to a much bigger audience, making it a one-stop-shop for the whole family.

Multi-device accessibility

Being able to shop online using a range of devices has opened up online shopping to a bigger audience. Specifically, it has made shopping a lot easier, more flexible and convenient for people with disabilities, older generations and people from different cultures or those who might struggle with English in everyday interactions.

The future of retail

Online shopping presents both opportunities and challenges for New Zealand’s traditional retailers. With consumers now being able to buy pretty much anything they want whenever they want, retailers will have to rethink what it means to be a physical outlet.

Traditional vs. Online

The continuing boom of online shopping has led to the closure of many traditional retail stores throughout the country. According to Retail NZ, the number of physical retail premises continues to shrink. In 2017, more retail stores closed than ever before in a one-year period. Since then, the number of traditional retail outlets closing has consistently been higher than that of new ones opening up.

Online shopping is also growing at a much faster pace than store-based retail. While brick-and-mortar sales were up 2% from 2017 to 2018, online sales saw a huge 16% increase during the same period. To put this even more into perspective, non-store purchases have seen a 113% increase between 2010 and 2019, showing how big the impact of online sales has been during the last decade.

However, there are plenty of traditional retail stores that have survived and continue to thrive, taking on the challenge and going with the times. These retailers adapted to changing consumer preferences, offered unique and valuable experiences, and leveraged digital channels to reach and engage their customers.

Omnichannel shopping

While there are still plenty of traditional brick-and-mortar stores around, the lines between online and offline shopping have become increasingly blurred. Many supermarkets, food chains and general retailers are now offering click-and-collect, allowing their customers to choose between in-store and online shopping or using a mix of both. At the same time, more and more online retailers are beginning to offer their products in storefronts.

New Possibilities

Being found online will be essential for retailers if they want to be successful amidst the competition. According to Retail NZ, online purchases will make up 20 percent of all retail sales in New Zealand by 2030. Shopping will increasingly be done using mobile phones, and more than a quarter of customers will use click-and-collect services to pick up their orders.

In the future, consumers are more likely to expect omnichannel retailing as part of their entire shopping experience. For traditional retailers, the biggest shift will have to be creating and promoting their online presence if they want to keep up with the ever-growing competition. Offering multiple channels to communicate and interact with potential and loyal customers will become the new norm.

At the same time, going online will allow retailers to gather and analyse data about their customers, making it easier to personalize their shopping experience and build stronger relationships. Business websites and social media accounts can be extremely helpful tools to market your company online, grow your audience and ultimately increase your sales.

If you would like to find out more about digital marketing or how to successfully take your traditional retail store online, contact the friendly team at Energise Web today. We specialize in web design and website development and offer a wide range of services including copywriting, SEO and digital marketing.

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