NZ eCommerce Stats

When New Zealand plunged into the first lockdown at the beginning of the Covid-19 pandemic, online retail jumped to an all-time high. With people unable to enter shops and the fear of catching the virus keeping many away from brick stores long after the lockdowns had ended, businesses all over the country running online shops were experiencing higher sales volumes than ever throughout 2020 and 2021. One client reported an 1800% increase in sales.

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For the majority of people, life has slowly returned back to normal. People are returning to traditional retail outlets again, hunting for bargains and filling their shopping bags in-store. What does that mean for eCommerce retailers for the years to come?

Here are the Top 5 trends for New Zealand online merchants to consider when setting up their marketing strategies for the future.

Online spending

The best news for online retailers is that Kiwis have embraced online shopping over recent years and increasingly continue to do so. In the first quarter of 2022 alone, Kiwis spent $2.2 billion on goods purchased online which is a whopping 86-percent-increase compared to the same quarter in 2020, just before Covid sent New Zealand into lockdown. According to recent studies, 83 percent of all New Zealanders will use the internet for making purchases by 2026.

Across generations

Younger generations tend to be more adventurous when it comes to using digital technologies. Online purchases have increased across all age groups in the last couple of years. In 2021, people aged 40 to 65 made 20 percent more purchases online than during the same time the previous year, with the 65+ age group showing a 14-percent-increase in purchases.

New payment methods

Debit and credit cards are still the preferred payment methods for most Kiwis, but buy-now-pay-later options such as Afterpay, Zip or Laybuy are becoming more popular, with 25 percent of the market share in 2020. According to JP Morgan, cash purchases will be down to just 1 percent of market share in 2023, with digital wallets such as PayPal, Google Pay or Apple Pay at 20 percent, bank transfers 34 percent and plastic slightly declining to 46 percent.

Economic reality

While the general eCommerce trend is pointing upwards, New Zealanders also faced a few economic setbacks in 2022 that have had a significant impact on their spending habits. Inflation is at a 30-year-high, influenced by ongoing international supply-chain disruptions, the war in Ukraine and rising petrol prices. This has resulted in a spending decline across all channels, with eCommerce still faring considerably better. Compared to the same time last year, online shopping was down only 4 percent in the second quarter of 2022.

Mobile commerce

Having a website that is mobile-friendly is more important than ever. Mobile commerce or mCommerce, the process of buying and selling products or services through a hand-held device including mobiles and tablets, now makes up the majority of eCommerce worldwide. According to the #Digital2022 report, mobile phones have also for the first time outranked traditional desktops and laptops in New Zealand as the most popular method for online shopping with more than half of the market share across the country.

Social media

Almost 90 percent of the New Zealand population now have at least 1 or more social media accounts. Research shows to what extent social media influences consumer shopping behaviour, making a good social media marketing strategy indispensable if you want to keep up with the competition. According to Forbes, 81 percent of all consumers make purchasing decisions based on their friends’ social media posts, and 78 percent of consumers state that what a business posts on social media has a big effect on their buying decision. Consumers are now also more likely to purchase directly through social media platforms such as Facebook and Instagram.

Supporting local

While Kiwis have always enjoyed shopping locally in-store, the pandemic has changed their online shopping behaviour to now do the same and support local businesses with online purchases. A 2020 report undertaken by New Zealand Post revealed that domestic online shopping made up 71 percent of all online shopping that year nationwide. Furthermore, more people are now shopping online that had never done so before.

Shopping sustainably

Kiwis are also looking for ways to reduce their environmental impact when it comes to shopping, whether it’s in-store or online. Especially Millenials, who have the highest spending power online worldwide, feel that sustainability is “important” to “very important” when making purchases on the internet. According to recent surveys among New Zealanders, more than a third of the population wants retailers to focus more on sustainability.

Outlook for 2023

There is plenty of potential for online merchants to establish themselves and create revenue over the next few years. However, the competition is growing rapidly and those that can master the economic restraints the best will clearly have the upper hand. Success will highly depend on factors such as customer loyalty and trust, and how well a business can establish their brand on the market. Knowing your target audience and understanding their shopping behaviour will be essential in order to plan and implement marketing strategies that work.