Why shoppers’ fingers are drifting to overseas sites

  • News
  • June 11, 2015
  • Elly Strang
Why shoppers’ fingers are drifting to overseas sites

The statistics don’t lie – New Zealand consumers enjoy getting their shopping fix at overseas sites.

BNZ’s latest results show spending at overseas sites is up 14 percent from April last year, while domestic spend is only up 3 percent.

New Zealand Post has jumped on the bandwagon and has been promoting YouShop, a service that ships goods to New Zealand from overseas sites not offering shipping here.

YouShop product manager Danielle Bolstad says the service has had a very positive response and is currently sitting just shy of 140,000 sign ups.

Its clear overseas websites are incredibly popular with New Zealanders.

Fan favourites include UK-based fashion site Asos, US-based fashion site NastyGal and Australian-based fashion site The Iconic.

Retail NZ communications manager Greg Harford says people are choosing to buy overseas for different brands, products and prices.

However, he says the issue with that is that the goods are being bought free of GST and duty.

This means international retailers have an upper hand over Kiwi retailers, as goods sold in New Zealand are at least 15 percent more expensive.

“In response, New Zealand retailers are working hard to keep the cost of goods down, and to streamline supply chain processes to enable this,” he says.

He says the advantage of buying from local stores or sites is that the Fair Trading Act and Consumer Guarantees Act cover consumers.

New Zealand laws not having jurisdiction on overseas sites doesn’t seem to be deterring shoppers from using them.

So, why are people choosing overseas sites instead of Kiwi ones?

A cross-section of millennial shoppers were asked on Facebook why they buy things on overseas sites instead of Kiwi ones.

The same answers were repeated in more than 20 responses: overseas shops offer more variety, items that are unavailable in New Zealand, and cheaper prices.

“There's a lack of variety amongst NZ retail stores and most malls are dominated by the same old stores from big companies (just look at the Just Group for example),” one shopper said. “It can be really boring and difficult to look for something different. In terms of clothing, when you do try to buy something special or unique the price tag is often way too high for the quality of the product. Shopping online has its risks at times but it offers so much more variety and at an affordable price.”

Another said, “Personally, I shop online because it's intimidating shopping in stores now. The pressure from the sales assistants, whether it be a forced 'Hello, hows your day?', watching you the entire time, to the obvious up-selling is getting out of hand and makes for an overall unpleasant experience when I just want to mindlessly shop for something nice. Leading to online shopping, which is mostly offshore because there are not that many established NZ retailers with an online presence. Even, Farmers and Northbeach are STILL working on providing a complete ecommerce service platform, offering half their range or not being consistent with pricing, new stock.”

Another response: “It depends what it is – clothes, etc, I always try to buy in NZ and will seek out NZ made and am happy to pay more for it (like Augustine by Kelly Coe). Cosmetics, though - the price difference is ridiculous (you can't tell me over 65 percent more is only markup and import tax) so worth ordering from overseas even with postage. It's been made a lot easier with YouShop.”

It’s hard to compete with the likes of Asos, which has a factory the size of six football pitches, or The Iconic, which has over 700 brands on offer.

But clever companies are figuring out ways to win Kiwi customers over.

A handful of online stores offer a price match system. If someone finds the price online for cheaper, it will match it.

Ecommerce giant Mighty Ape offers people the chance to request a price match by clicking a link on a product that says, “Ask us to beat it”.

It also offers speedy same day pickup or overnight delivery, which set its apart from overseas sites.

Good As Gold, a Kiwi online fashion site with stores in Auckland and Wellington, offers free shipping worldwide if customers spend over a certain threshold.

It also offers price matching on a case-by-case basis both online and in store. 

Owner Ruben Bryant says the company has been offering the service for a year or two.

“I don’t know why you wouldn’t do it, why would you want to lose a sale?” he says.

He says it’s not a guarantee, as the company factors in things like shipping costs when calculating the price of an overseas item.

 But he says it opens up a dialogue with their customers and is worth losing money over.

“We say we won’t match it if it’s on sale overseas, as there’s different terms with it, but it makes sense to offer it,” Bryant says.

“If we’re going to lose $10 but retain a customer and keep them coming back then why lose out on that?”

“If people pull out their phone in our stores [to look at other online sites] we say we can help them out and ask them about it. It’s about not being scared, as this is the reality now.”

Good As Gold’s website has been up and running since 2005, so Bryant’s seen New Zealand’s ecommerce journey play out in front of his eyes.

Despite retaining customers through price matching, he says the fact a tax hasn’t been put on online overseas purchases is “crazy”.

“It’s harming our business. It’s criminal they’re not doing it. I have 20 staff and a New Zealand business that’s growing, but every day there’s a new online store to compete against,” Bryant says.

He says Good As Gold also talks with its suppliers about getting good prices so they can compete better on a global scale.

He has some food for thought for customers that shop overseas GST free.

“What I say to customers is, ‘What would you do if there was no shops?’ If you’re trying to save $10 on a pair of shoes, just think of how boring New Zealand would be if there was no shops.”

​ ​

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