New Zealand Post (NZPost) released a new online shopping report showing that Kiwis spent more than $2.2 billion on physical goods online during the first quarter of 2022.
That is a 31% jump over the first quarter of 2021 (Q1 2021) and a mammoth 86% rise over the first quarter of 2020.
Q1 2020 was the first quarter where New Zealand saw the impact of COVID on shopping numbers with lockdowns driving people online from March 2020 on.
Going back to Q1 2019, to get a true pre-COVID comparison, the report indicates online spending numbers are more than double what they were just three years ago. This really captures the seismic shift that online shopping has gone through in such a short period of time, NZ Post’s report said.
The numbers for Q1 2022 represent the second-largest quarter NZPost has tracked since it began tracking online spending. Only the previous quarter (Q4 2021) which includes the busy holiday season was higher, reaching $2.5 billion.
Q4 2021 had the typical sales drivers during this period which include big sales events such as Black Friday, Cyber Monday, Click Frenzy, and the traditional final Christmas rush.
Furthermore, physical retail stores were closed or restricted for a large part of the quarter due to Covid restrictions. As a result, the peak Q4 2021 online spend was up a massive 25% over Q3 2021.
Omicron Impact on New Zealand Online Shopping
Online spending in the first quarter of 2022 didn’t have these same drivers and, in fact, was subject to a number of headwinds like the human resource challenges caused by Omicron, a global conflict, further supply shortages and the rapidly rising cost of living.
As a result of Omicron’s rapid spread, online shopping spend levels increased at the start of the quarter. With a largely unboosted population, the fear of an unknown new strain, and strict isolation requirements, online shopping continued to be a smart choice.
The close contact rule at the time resulted in many people isolating at home including entire classrooms, daycare centers and businesses. For them, the only way to shop was online.
By late February, when the country moved to Red/phase 3, under the traffic light system, and the rules were less restrictive on businesses and shoppers, NZ Post’s analysis saw weekly spend levels exhibit a steady decline.
But even at these lower levels, they were well up on the same months of previous years, suggesting a significant long-term change in shopper behavior had occurred.
Despite the declines in the back half of the quarter, Q1’s online spend didn’t lose all the big gain it made in the previous quarter, finishing only 12% down on Q4 2021.
Total retail spending for Q1 2022 – online and offline – was $16.4 billion, up over a billion dollars (7%) over Q1 2021.
Some would argue that, with inflation running at 6.9%, much of this rise reflects rising prices rather than real growth.
More than half of this increase comes from the uplift in online spending, showing what a key role online plays in keeping the momentum going in New Zealand’s retail sector.
The line between online and offline has become increasingly blurred with the growth of click and collect and other omnichannel shopper experiences.
Online spending made up 14% of total spending for the quarter, up from 11% in Q1 2021 and 8% in Q1 2020.
NZ Post has seen online’s penetration remain at this higher level for the last three quarters, suggesting it’s yet another area where a new benchmark has been set.
And while the quarter as a whole was up from Q1 2021 the report suggests a progressive monthly decline in both spending levels and the number of people shopping online throughout the quarter.
It’s the first time this trend has been seen in the last three years which NZ Post explores in more detail in its article ‘Omicron bucks the trend‘.
On a more positive front, Kiwis have been showing their love to local online retailers and this also hit a new high this quarter, with 77% of online spending with NZ-based businesses.
For more details on what has driven this growth, visit NZ Post’s eCommerce Spotlight analysis for Q1 2022 here.
Also, BigCommerce recently released its 2022 State of eCommerce report for Australia and New Zealand which also includes additional data points not covered by NZ Post’s eCommerce Spotlight report.
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