Click on to online shopping

By Bridget Gourlay

I recently read an amazing book, the type where you become so engrossed in the world the author has painted that when you are pulled out of it you look around, blinking, momentarily startled at your surroundings.

With a friend’s birthday coming up, I knew it would be the perfect gift. So I hopped online and checked out what Amazon was selling The Tiger’s Wife for.

It’s a popular book that recently won the Orange prize so I wasn’t surprised to find I could get it delivered to my door for $10. To buy it in hardcover, it was $21.

Being Gen Y I’m surgically attached to my keyboard, so online shopping is just a natural extension of myself. But there is another option and that’s (brace yourself) buying it at an actual, real live shop! But therein lies the rub — it’s often much more expensive.

At the shopping mall closest to me, a large nationwide bookseller was selling The Tiger’s Wife for $27.99. Even a New Zealand book, Mister Pip by Lloyd Jones was $29.99 at the bookseller, and $15 from Amazon.  

Shopping has been part and parcel of economies since human history began. Thriving markets existed in Ancient Egypt and Greece thousands of years ago, and in the world’s biggest cities, street names became synonymous with retail — the Champs Elysee, Fifth Avenue, Oxford Street.

But with the advent of the internet, it’s possible to buy things online with just the click of a button. No longer do we have to physically go to the shops for a bottle of perfume or a tennis racket.

It’s easy to hop on the internet, choose what you want and have it delivered to your door. Even with postage fees, eliminating middlemen, shop rents and staff salaries make many items cheaper than they would be in store.  

Price Waterhouse Coopers and Frost & Sullivan released a report earlier this year which showed online shopping increasing to NZ$2.68 billion in 2011 — an increase of 12 percent from 2010.

Almost half of the New Zealand population will shop online in 2011 with each customer spending an average of almost NZ$1400. These figures are set to increase again, with the total online spend reaching $4.22 billion by 2015.

So what does this mean for retailers? Has the internet killed shopping, the way it so mercilessly dealt to CDs and is now savaging TV and DVDs?

James Gilbert, director of Australasian ecommerce provider Solutionists, doesn’t think so. Firstly, he says there are some products that just don’t work online such as the $2 Shop. Secondly, retailers have a unique insight into what their local customers really want and can use this knowledge to create products and services under their own brand that uniquely satisfy the requirements of their customer group.

“For retailers who take this own brand approach, suddenly the world of internet shopping becomes an opportunity instead of a threat,” Gilbert says.

He warns that it is equally important your online offering is delivered at a world-class standard, in order to remain competitive in a global market.

“The return on investment figures for many of our clients shows that retailers could expect to recoup their full ecommerce investment within six months of launch. While the cost of setting up an enterprise level webstore can be significant, it is nothing when compared to that of a physical store — with much lower overheads, and a much bigger audience.”

Twice as much

Wellington entrepreneur Goisha Piatek agrees. Her company Kowtow sells boutique fair trade and organic clothing. “We got our online store revamped in September last year and the month we did that our sales doubled. How easy a site is to navigate is so important. We get sales every day from online.”

While Kowtow has stockists around the country and in Australia and Japan, Piatek says online retail sales are “huge”.

“We sell causal garments so once people know their size they can re-order off our online store.”

Social media is an integral part of online shopping with 34 percent of shoppers following an online shopping site on Facebook.

This is something Kowtow has noticed. “I think one of the most potent ways of advertising is through Facebook and Twitter — it’s just huge,” Piatek says.  

“You really do notice the power of it. If we have a sale, or new stock has arrived, and

we put that on the website then you can really see the number of online sales increasing that day.”

However, because Kowtow sells loose fitting garments, Piatek doesn’t think everyone in the fashion industry has as much online success as her. Part of the thrill of shopping is trying numerous things on, and making sure they fit properly.

“A company with dresses and tailored clothing — well, you do need to try it on. And it’s just that much harder to click the pay button on the internet when it’s $500 dollars. A baggy T-shirt for $100 is different.”

Physical appeal

Newmarket Business Association head Ashley Church agrees that there are some things about the physical shopping experience that still appeal to Kiwis and we shouldn’t be moving out of shops just yet.

“Kiwis are innately pragmatic people who see the internet as simply another part of the overall shopping experience. We like the convenience of the internet for ‘simple’ purchases — but we also recognise that it has its limitations.”

He cites immediacy, safety, personal service and ‘the experience’ of in-store shopping as reasons why people will be in no hurry to replace it completely with the internet anytime soon.

Fact File

• Almost half of the New Zealand population shopped online in 2011
• Each shopper spent an average of almost NZ$1400
• Total country online shopping expenditure for the year is expected to reach $2.68 billion
• Of the 2.68 million, an estimated $910 million or 34 per cent will be spent with offshore online retailers
• Online shopping has increased 12 percent since 2010
• Online retail expenditure accounts for 5.1 percent of all retail sales. This puts New Zealand on a par with Australia but still well behind USA and UK markets.