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Retailers must invest in new tech to keep up with online shopping demand

By Shannon Williams
Mon 4 Jul 2022

In 2023, New Zealand shoppers are expecting digital transformation, with 8 in 10 saying retailers need to invest in new technology, according to a new report.

New research from Klarna reveals that 4 in 10 New Zealand shoppers believe they will shop mostly online in 2023. But there are pain points in the digital shopping experience to address, and the vast majority (79%) believe retailers need to continuously invest in new technology to meet the evolving needs of consumers.

The report Shopping pulse: New Zealand includes insights based on the findings of a recent survey of 1,085 New Zealand shoppers and an internationally comparative survey of over 11,740 respondents across 11 other countries (the US, UK, Australia, Germany, Austria, the Netherlands, Belgium, France, Sweden, Norway and Finland).

"We have seen shopping habits change since the beginning of the pandemic," says Katrina Ang, Klarna director of marketing, Australia and New Zealand. 

"This has resulted in a higher demand for more purchasing opportunities at our fingertips, as well as greater expectations when it comes to the online customer experience," she says.

"Our new report reveals that almost 1-in-2 New Zealanders believe that they will shop mostly online in 2023. I'm looking forward to seeing how retailers in the year ahead adapt to the ever-evolving online customer and the innovative new tech that will emerge from this."

Perceived hurdles in the online shopping experience may prevent digital growth and todays shoppers are looking for innovative solutions offering a better shopping experience. The most wanted improvements online are frictionless payments (41%), personalised product recommendations (33%) and a seamless omni channel experience (33%).

4 in 10 New Zealand shoppers believe they will shop mostly online in 2023.

Forty per cent of New Zealand shoppers believe they will make most of the purchases online in 2023, which ranks 6th out of 12 in an international comparison, and on par with Australia. This means that New Zealand shoppers believe they will be shopping online in the future to a good extent and ahead of Austria (39%), Finland (36%), France (35%), and Norway (30%).

Other key findings from the report include:

Entertainment is the only product category in New Zealand shopped more often online than in physical stores.

Clothing & Shoes, Groceries, Home & Garden and Pharmaceutical Products are bought in physical stores to a much higher extent than other product categories. During the past month, 49% shopped Clothing & Shoes offline, while 33% did so in physical stores - the equivalent shares for Groceries was 82% in physical stores (vs 29% online), Home & Garden (50% offline vs 17% online), Pharmaceutical products (58% offline vs 18% online).

Mobile shopping is on the rise. Device preferences are shifting as 61% have shopped more often on their mobile phone compared to just two years ago (Gen Z 78%, Millennials 66%). Looking for deals and price promotions (95%), comparing prices (91%) and keeping track of deliveries and returns (89%) are the most common mobile shopping-related activities. Almost 9 in 10 (86%) of New Zealand shoppers have shopped using their smartphone to research products while in physical stores.

Investment in new technologies by retailers is critical. The majority of New Zealand shoppers (79%) from all generations believe retailers need to continuously invest in new technology to meet the evolving needs of consumers, which holds true for all generations (Gen Z 72%, Millennials 75%, Gen X 68% and Baby Boomer 65%).

Social media and online live shopping events drive discovery and more informed purchasing decisions. Almost 3 in 10 New Zealand shoppers have purchased a product after seeing it on social media. The top social media platforms for shopping are Facebook (61%), Youtube (50%) and Instagram (43%). Among those social media shoppers, nearly 7 in 10 (67%) have purchased a product directly from the platform, ranking 1st out of 12 countries - ahead of the US (58%), and Australia (51%).

Shoppers are looking for innovative online shopping experiences. Although only 18% have participated in a livestream shopping event, 21% have heard about it. Over 3 in 5 Gen Zers in New Zealand have already participated in such an event. Some of the biggest benefits of livestream shopping are recommendations (32%), allowing more informed purchase decisions (31%) and real-time engagement (30%). Interactivity (games, quizzes, giveaways) appeal the most to Millennials (36%).

Shoppers look for smarter payment options. Whilst New Zealand shoppers have the highest preference for physical/plastic cards (75%), there is a growing interest towards virtual cards. 91% of those who have tried a virtual card (29%) would rather make all future online purchases with virtual cards instead of physical cards, mainly because of convenience (65%), increased anonymity, privacy and security (56%) and fraud protection (48%).

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