New Zealand online spending index launched
As online purchases continue to rise, the new BNZ Online Retail Sales Index will provide a much clearer grasp of online spending trends, including online purchases made from New Zealand retailers and purchases made by New Zealanders from overseas sites.
What is particularly concerning for local online retailers, and highlighted in the first index released in October, is the consistently increasing level of spend by New Zealanders at international online merchants.
The report highlights this is likely a result of a combination of the strong New Zealand dollar, and free shipping and no-questions-asked returns policies being implemented by international retailers to drive their share of the billion dollar export industry being driven by Kiwi consumers.
If this level of spend at international retailers continues at its current pace, it is likely New Zealanders will buy as much from overseas as they do locally in the next decade or so.
Launched in October, the monthly index draws on data from millions of monthly card transactions, which are scaled up to represent the broader New Zealand economy.
BNZ worked with Marketview, specialists in analysing and managing transactional data, to develop the index.
“Online spending is both an opportunity and threat for New Zealand retailers. This report fills a major knowledge gap in this rapidly changing market place,” Marketview’s Stephen Bridle said.
“We’re a billion dollar export market for international online retailers. It’s worthy of attention, hence the increasing number of sites offering free or low-cost shipping and no-questions-asked returns.”
For the 12 months to 30 September 2013, online retail sales across the categories the index monitors were to the value of approximately $2.7 billion, with $1 billion of that spend made at international merchants.
That equates to nearly 60 per cent of sales being made at New Zealand retailers. However, the report indicates purchases from offshore sites are growing at a faster rate than those made from local retailers.
Online retail spending in the monitored categories was equivalent to six per cent of traditional sales in the 12 months to 30 June.
- The seasonal pattern for international online purchases generally peaks in November, while local online purchases generally peak in December;
- The strong New Zealand dollar is a likely contributor to the increase in international online purchases;
- Online purchases made by Kiwis at international retailers are currently growing 10 per cent faster per annum than online purchases at local online retailers;
- The index covers supermarket and grocery stores, specialised food and liquor, furniture, floor coverings, housewares and textile goods, electrical and electronic goods, hardware, building and gardening supplies, recreational goods, clothing, footwear and personal accessories, department stores, and pharmaceutical;
- The index is a monthly report, developed by the BNZ and Marketview – the first index was released in October 2013;
- Copies of the monthly index can be downloaded here.