Growth in online shopping slowing in NZ
AUCKLAND: A new report has revealed some interesting findings about how consumer behaviour has changed at the tailend of the coronavirus pandemic.
Shopping and spending behaviour has shifted from the frantic scenes of bulkbuying to a spike in online, and now it appears growth in online shopping is slowing.
New data from professional services firm EY shows just 17% of New Zealanders expect to order products online more often, compared with 37% recorded at the start of the pandemic.
EY’s latest Future
Consumer Index survey shows global demand for ecommerce is plateauing and has been in New Zealand since the middle of the year.
In the UK and Australia the numbers for online spending intentions are also low, just 14% of consumers surveyed there saying they intend to shop online more. In France that number is 13% and 12% in Canada.
Customer and growth lead at EY NZ Michael SummersGervai said as society moved back to living normally after heavy disruption brought about by the pandemic and subsequent lockdowns, this was reflected in the way New Zealanders shopped — and more were now heading back to physical shops to make a purchase.
Fiftyone percent of New Zealanders have ordered a product online in the past three months.
At least one in five people say they intend to shop online and in store in coming months.
‘‘At the end of 2020, during the height of the pandemic, we saw New Zealanders shopping online at its peak, [when] 86% percent of Kiwis were shopping online, at a time where people were forced to change their channel of consumption and shopping. Since then we started measuring how much more Kiwis expected to shop online moving forward,’’ Mr SummersGervai said.
‘‘As of June 2020 it was about 37% more — about a third were going to shop more online and that went down to about 30% and the latest stat has come in at around 17%. It is still growing but I think it has got to quite a high level and now it is easing back a little bit as restrictions open up and Kiwis want to get out a bit more.’’
Outside of online shopping, Kiwi’s spending habits in general seem to have been reined back in recent months — this is likely the result of the rising cost of living.
Almost 50% of New Zealanders surveyed said they would only be spending money on the essentials in the future, while 35% said they were trying new brands in an attempt to cut back on costs.
Fiftyeight percent of those surveyed said they were now spending less on nonessentials such as fashion and cosmetics and homewares, and of those 39% said they were now shopping less often for nonessentials.
‘‘Conservative spending is naturally slowing ecommerce growth,’’ Mr SummersGervai said.
‘‘Given the cost of living pressure that everybody is feeling we are seeing a reduction in shopping around. Fifty percent of people are only purchasing the essentials and a third of Kiwis are trying new brands to reduce new costs. There is a reduction in nonessential spending.’’
EY’s data as of June, shows 43% of Kiwis intended to shop more at local small businesses, with a quarter changing brands to support the local economy.
One in four Kiwis are also switching from brands to private labels as a costsaving measure.
‘‘This change in consumer behaviour and sentiment is also very much around spend expectations and where people are spending time. Over a third of people expect to spend more time at home and one in five are expecting to visit physical stores less often.’’
The growth in ecommerce activity was beginning to slow down in line with what other Western markets had already been experiencing for several months, but the data showed there was still a desire from consumers to shop online, Mr SummersGervai said.
‘‘People had to shop online before for the past two years — it was a forced activity.
Now as restrictions ease it has disappeared largely and people can now go out again but it doesn’t mean that ecommerce will stop at all growing. That is still a global trend that will continue.’’ —