As Click Monday kicks off, a look at NZ online vs offline retail spending stats - and how much online money's going offshore
More than 60 online and online/offline retailers clubbed together to promote Click Monday - a 24-hour online pre-Christmas sale from 7pm tonight (see the list of participating e-tailers here).
It's based on "Cyber Monday" or "Black Monday" in the US, which itself is an add-on to the long-standing "Black Friday" in bricks-and-mortar retailing ("Black Friday" is the Friday after Thanksgiving, and traditionally seen as the start of the Christmas shopping season. There are competing explanations for the name; one is that it marks the point that retailers, often in the red for most of the year, start to make a profit).
Drawing on data from PwC and Nielsen surveys, among other sources, the NZ Retailers association estimated that online spending totalled $3.7 billion or 5.26% of the estimated $70.3 billion total NZ retail sales for the year to December 2012 (a comparable figure wasn't collected for the previous year).
Nielsen NZ associate research director Tony Boyte says that compares to around 4% for the UK, 8% for Australia and 9% in the US.
A key finding of the Retailers Association survey was that around a quarter of offline sales - or just under $1 billion - went to offshore e-tailers, from "real" goods ordered from the likes of Amazon.com to digital downloads of songs, movies and books.
Retailers have reacted with a stick, campaigning to wipe out the GST exemption for imported goods worth under $400 (a government working party is currently looking at that option and will report before Christmas).
With Click Monday, it's good to see them offering a little carrot as well.
It'll be interesting to see how the stats shake out this year.
My suspicion is NZ won't have advanced a heck of a lot beyond 5.26%.
Major retailers like The Warehouse have been lukewarm in promoting their online operations, and noticeably leery of breaking out online revenue figures in their earnings.
But a lot has been happening behind the scenes. The Warehouse Group (TWG), for example, spent $33 million in March to buy online retailer Torpedo7 (including 1-Day). And in July it took a 50% stake in Shane "GrabOne" Bradley's ShopHQ for an undisclosed sum. Both moves brought practical and entrepreneurial expertise onboard. It'll be interesting to see how that plays out this Christmas and next.
Certainly, next year it would be good to see shareholders in the various big retailers pushing for more information about online sales, and some hard sales data.
Just more information for investors full stop would be good.
For example, The Warehouse Group (TWG), held a "Click Madness" day on November 12, with online sales across its Warehouse site, and those of recent acquisitions like Noel Lemming, Torpedo7, 1-Day, , ilovebeauty, pet.co.nz, No.1 Fitness and shotgunsupplements.co.nz.
How well did it go? Sales exceeded Boxing Day, TWG CEO Mark Powell, noting the day after Christmas is one of the group's busiest.
So how much does The Warehouse sell on Boxing Day?, NBR inquired. It's easy to see why stores are packed on Boxing Day, with sales, plus people rushing to return or exchange gifts, but what's the draw for online? What's the online Boxing Day turnover for thewarehouse.co.nz? The company refused to say.