22 min read
Introduction
COVID-19 has fundamentally changed how businesses operate, most notably online trading. Since the start of the pandemic, nearly half of New Zealand businesses say they’ve increased online business. 88% of New Zealanders are now shopping online.
While some merchants expected the online shift to be temporary – a necessity in a world of lockdowns and social distancing – the shift was well underway before the start of the pandemic. We’ve witnessed the acceleration of an existing trend that is unlikely to turn back in the other direction.
Kiwi businesses must adapt and change with the times and know where to focus their growth investments. This includes adapting to the latest trends but also being agile, ready to accommodate customer needs and open to new ideas in a post-pandemic world.
Despite the shifting landscape, customer values are similar to what they’ve always been. From a merchant perspective, that means getting the fundamentals right: positive customer experiences and delivering parcels on time and undamaged when it comes to trading online. Consumers consider the delivery experience a key part of the overall shopping experience; it reflects directly on the merchant. Choosing a courier company you trust to deliver packages quickly and safely is of utmost importance for your business, particularly as online spending is only expected to increase.
New Zealand Couriers facilitates over 34,000,000 parcel movements yearly between people, merchants and organisations all over New Zealand, so we know a thing or two about getting deliveries right the first time.
New Zealand Couriers have created this report to help small and medium-sized business owners understand the eCommerce opportunities for their business, where successful eCommerce businesses are investing their money for the best ROI and what to ask of their delivery partner to ensure the best results for their business growth.
Merchant Report 2023: eCommerce Insights
New Zealand Couriers have created this report to help small and medium-sized business owners understand the eCommerce opportunities for their business
Overall Trends
Online trading is here to stay, and New Zealand merchants who don’t offer it are missing out on serious sales.
Our survey found that half of all Kiwi businesses have increased online trading since the onset of COVID-19, driving a massive surge in the number of parcels sent. Retail NZ reported that non-store trading had grown 133% in the years from 2010-2019, showing that online shopping was important to Kiwi consumers even before COVID-19. This isn’t a passing fad.
COVID-19 has certainly impacted the way Kiwis shop
71%
Of merchants send more parcels than they used to
68%
Of global customers agree that COVID-19 has elevated their expectations of companies’ digital capabilities.
88%
Of Kiwis expect to receive more parcels going forward.
Online selling trends
The increase in online trading has seen merchants in New Zealand adopt new digital strategies to attract new business. However, despite more businesses moving into the online world, the most common business priority is the same as it’s always been – investing in a good customer experience.
While the online customer experience is very different to the face-to-face commerce that many Kiwi merchants are used to, online platforms offer a huge opportunity to interact with customers and attract new ones.
Where New Zealand eCommerce businesses are investing
42%
Say investing in digital marketing is a priority to support eCommerce activity
48%
Use social media advertising to acquire new business
48%
Are currently investing in improving eCommerce customer experience
43%
Will invest in improving customer experience in the future
Businesses see the delivery experience as a key part of their overall customer experience, and customers agree.
The things merchants value most in a delivery company reflect what New Zealand consumers want: to have parcels delivered as expected, on time and undamaged.
For small businesses, pricing and on-time delivery are especially crucial.
Having a range of premium delivery options is important because businesses know customers are willing to pay for them. In particular, customers want to be able to get same-day delivery, secure delivery of high-value goods and oversized/heavy freight delivery.
What businesses want in a delivery company
Customer experience is very important to new entry businesses because maintaining customers and continuing to grow is very hard… If I know the parcel will arrive, it’s less stress from the customer’s perspective.
Stella Wang, Online Manager
Kmart
Merchants across Aotearoa outsource delivery, and the delivery experience can make or break a business’s reputation. Consumers have been understanding of delivery delays throughout the pandemic, but as we move beyond lockdowns and restrictions, they’re much less forgiving.
A rise in contactless deliveries has heightened the need for security and transparency:
- Packages must be kept safe and secure throughout the delivery process, including being left in a safe place.
- Kiwi consumers want to be kept informed about their delivery status; proactively communicating delays makes all the difference.
Unless an eCommerce enjoys a virtual monopoly, to remain competitive, it is essential they can trust their freight partners to meet customer delivery expectations.
Rob Levy, Head of Marketing & Sustainability
New Zealand Couriers
Business tip:
Work with delivery partners who have a history of getting items where they need to go on time.
Merchant Preferences
The three most important factors to Kiwi businesses regarding delivery were competitive pricing, parcels not getting lost or damaged and parcels arriving when they said they would. Consumers share these values.
Merchants also value accurate, up-to-date parcel tracking and a delivery company offering a range of service options. These are particularly crucial for larger businesses with limited interaction with individual customers beyond the delivery.
Though automation is becoming more prevalent and is a money saver for businesses, New Zealand merchants also wanted to form a relationship with their delivery partners. They value a human-centred approach to resolving issues.
If something goes missing or a parcel is lost, we have a relationship with our key account manager so we can get it all sorted and get to the bottom of it… having someone to investigate that for us is really important from our point of view
Large Vape Retailer
Sends more than 100 parcels a week
While the top attributes are similar among all demographics, there are some slight differences with competitive pricing and on time delivery being more important for small businesses. Live tracking of delivery is also more important for those sending a higher quantity of parcels.
| How we define business sizes | No. of people |
| Small Businesses | 1- 20 people |
| Medium Businesses | 21- 50 people |
| Large Businesses | 51+ people |
Most important delivery attributes by business size
Business tip:
In addition to tracking capabilities and updating the customer on a parcel’s status, a delivery partner that offers flexible delivery – like nominating a safe place to leave a package or changing the date and time of delivery – can bolster your brand’s reliability.
Beyond reliability and price – retailers value flexibility regarding a delivery partner.
Contactless delivery became a necessity due to COVID-19, which customers embraced; however, post-lockdown, Kiwi merchants are starting to receive complaints about parcels left outside, damaged or stolen. Businesses must work with delivery partners to give customers more convenient and secure delivery options.
Business tip:
In addition to tracking capabilities and updating the customer on a parcel’s status, a delivery partner that offers flexible delivery – like nominating a safe place to leave a package or changing the date and time of delivery – can bolster your brand’s reliability.
Selling Platform
For Kiwi businesses without an online shop, Trade Me is the most popular platform for selling products. 50% of merchants sell through Trade Me, nearly double the number that use Facebook Marketplace (26%).
The Trade Me user base is fiercely Kiwi, so it can be a useful platform for businesses looking to sell to New Zealanders. However, maintaining trust is difficult when working with Trade Me as it is a shared platform that anyone can access to sell items.
With Trade Me as a middleman in the customer relationship, creating brand awareness and predicting customer demand can also be harder.
Existing marketplace platforms used for selling (%)
“We’ve been on Trade Me for six years, and although we have to pay a yearly fee, we don’t have to maintain a website. However, we face challenges when our products are not on the front screen of our customer’s search results. If you want the product to be displayed on the first page, you have to pay extra..”
Trade Me retailer, Sends 50+ parcels a week
Merchant Report 2023: eCommerce Insights
New Zealand Couriers have created this report to help small and medium-sized business owners understand the eCommerce opportunities for their business
Social Media
The online shift has seen many New Zealand businesses turn to social media to increase brand awareness and sell products directly through social platforms.
Standing out in a sea of brands
Globally, 34% of businesses said that increased competition was their biggest external challenge to social media advertising. With more and more brands moving to social platforms, it is becoming increasingly difficult to stand out from the crowd.
Business tip:
Invest in creative social media advertisements with sophisticated targeting to reach the right audience and cut through competitor noise.
62%
Are on Facebook
48%
Are using digital
advertising on social media to acquire new business
44%
Are on Instagram
42%
Are prioritising digital marketing and advertising to support eCommerce activity in the future
Sustainability
Sustainability is gaining traction around the world and may be more important to Kiwi consumers than merchants realise.
We have embedded four eco-friendly plastic principles into the New Zealand Couriers model
- Eliminate the plastics we don’t need
- Innovate to ensure the plastics we do need are reusable, recyclable or compostable by 2025
- Re-circulate the plastic produced, by significantly increasing the amounts of plastics reused or by ensuring it is made into new packaging
- Increase the recycled content in our plastic packaging
Merchant Report 2023: eCommerce Insights
New Zealand Couriers have created this report to help small and medium-sized business owners understand the eCommerce opportunities for their business
Changing Consumer Behaviour
What consumers want vs what merchants think they want
While the retail landscape has shifted in the internet age, consumers still value the same thing in delivery companies – reliability. Kiwi merchants have a fairly accurate perception of what premium delivery options consumers are willing to pay extra for. This is possibly because they have similar delivery priorities.
The premium services Consumers/Merchants would pay extra for:
| Consumers | Merchants | |
|---|---|---|
| Same day Delivery | 64% | 69% |
| Secure delivery for high value goods | 68% | 67% |
| Oversized/heavy freight | 64% | 64% |
88% of Kiwis now shop online.
Many expert predictions see this as an acceleration of long-term trends rather than a temporary adjustment during the COVID-19 pandemic. Consumers now purchase items online that they didn’t previously, including groceries, health and hygiene products and home essentials. Global eCommerce revenue is expected to grow to US$3,453.3 billion by 2024.
Pandemic-fuelled online shopping is here to stay
Our research found that half of Kiwi businesses reported that they now do more online trading as a result of COVID-19. Though boosted by pandemic lockdowns, the growth in the availability and convenience of online shopping is here to stay and customers are sure to continue choosing online marketplaces.
With online shopping here to stay, the speed and reliability of delivery is what will set merchants apart when it’s customers are choosing where to buy from.
Rob Levy, Head of Marketing & Sustainability
New Zealand Couriers
Changes in expectations due to COVID-19
Shoppers need to be satisfied with parcel delivery before confirming a purchase: 87% of Kiwi consumers check the cost, time frame and tracking details first. Returns policies matter too. A free returns policy isn’t as important as free and fast delivery, but it’s still a top consideration for 30% of Kiwis when they’re shopping online.
The returns experience is critical, and has a real impact on the chances of a customer returning to buy from a retailer again. Free returns is the most significant aspect of a satisfactory returns policy.
42%
Say free returns is the most significant factor of a good returns experience
73%
Say the returns experience impacts the likelihood of buying again
Business tip:
Customers want control of how their parcels are delivered. Offer them options on delivery timeframes and returns.
eCommerce platforms that make payment methods seamless and easy will enable a better customer experience at the checkout. Kiwis’ top three preferred payment methods are:
Credit Card
Bank Transfer
E Wallet, Apple Pay, Android Pay etc.
Business tip:
Show customers an itemised breakdown of all costs before they are asked to input payment details.
Customers want to see cost breakdowns in their delivery, so having transparency at the checkout is key. Break down the shipping cost, provide a guaranteed delivery date, and include prices for alternative delivery options.
How delivery impacts customer loyalty
Two thirds of consumers say they know the company that delivered their last package. Just over a third have a favourite delivery company. Delivery companies, and therefore merchants that use them, can expect to be remembered for the service they gave.
35% of Kiwis say they want to be able to choose their delivery company. Larger retailers have learned that giving regular updates on a parcel’s journey can help quell customer frustration around delivery and keep them coming back for repeat orders.
There is a lot of uncertainty around how things are going for a parcels journey… we need to make sure the customer is informed throughout the journey in case of any expected delivery times or delays and that’s really important for us.
Stella Wang, Online Manager
Kmart
What drives repeat customers?
Business tip:
Avoid falling behind by investing in a seamless eCommerce experience and digital marketing strategies
Strategies that work
Choose a delivery partner that reliably gets parcels where they need to go
Ensure customers are kept updated on the status of their parcel and any potential delays
Invest in digital marketing to attract and retain customers as consumers increasingly
move online
Work with service providers on ways to automate parcel dispatch
Utilise eCommerce platforms that serve both your business needs and customer desires
Brand Building
When we spoke to New Zealand businesses, they were keenly aware of how important a strong brand presence was and how the delivery experience directly affected their brand’s reputation.
Online Manager at Kmart New Zealand, Stella, notes that though the Kmart brand is well known and respected, many customers are new to shopping online with them.
A lot of people hadn’t done online shopping before – so it’s more important to use to give the best customer experience from the first time they get onto the page.
Stella Wang, Online Manager
Kmart
The courier service directly reflects on our service. Our business success is highly reliant on them.
Kennedy, Manager
Excellent Screen Printers
Top 3 tips for building brand awareness
- Tailor your marketing strategy around your business goals, whether that is getting more eyes on your website or more people sharing your brand on social or anything in between.
- Take an omnichannel approach so that your brand stays top of mind for consumers.
- Mix traditional advertising methods like TV and radio with the mass reach capabilities of digital to maximise the effect of your marketing.
Invest in social media
Businesses are investing more in digital advertising and social media, this is where the eCommerce customers are.
Which social platform has the best return from paid advertising?
Instagram overtakes Facebook
Instagram appears to be overtaking Facebook as the most effective social media advertising platform:
46%
Of advertisers say they get the best return from Instagram
44%
Say they spend most of their social advertising budget
on Instagram
19%
Say they spend the most on Facebook
Top 3 tips to leverage your digital advertising:
- Utilise audience data to find out what your customers want and where they hang out online, then meet them there.
- Compelling creative elements in your ads and correctly targeting your audience are both important – don’t neglect one or the other.
- Video content on social media platforms has been trending for years now and isn’t going anywhere. Consider using video to engage with your customers in a new way.
Online experience is customer experience
Once your brand building and advertising have brought people to your website, keeping them engaged with your products is the next step. If your business has its own eCommerce website, the product pages are crucial to making sales.
Half of online purchases in New Zealand are made through a mobile phone or tablet, so ensuring a smooth experience on the mobile version of your website is imperative as well.
Top 5 tips for an engaging product page:
- Clear navigation: Make sure it is easy for customers to find what they’re looking for.
- Detail Information: Include as many specifics about your product as possible, including pricing details.
- Customer reviews: A review from a third party goes a long way in generating customer trust in your brand.
- Prominent branding: Customers want to know where they are buying from and what that brand stands for.
- Optimised website: A website that is too slow to load, too difficult to navigate or just doesn’t look right will turn customers away, even if they like the product.
Delivery deal breaker
Cart abandonment is common for eCommerce businesses, with most people reporting they abandoned their cart due to extra costs being too high.
For Kiwis, delivery can be a deal breaker too, with 41% saying they would abandon their cart if the delivery cost was too high and 26% saying a lengthy delivery time would cause them to abandon their cart.
Seamless Checkout
Transparency and efficiency is key in creating a seamless checkout experience for customers. 95% of Kiwi consumers expect to see all pricing before they check out and 94% of them say they want a guaranteed delivery date.
Average cart abandonment rate
70% Desktop
86% Mobile
81% Tablet
Top reasons for abandonments during checkout
55%
Extra costs too high
34%
Account is required
26%
Checkout is too long
21%
Unclear pricing
17%
Don’t trust the site
Instagram overtakes Facebook
Return experience
42% of New Zealanders say that free returns are the most significant factor of a good experience and 73% say the returns experience affects their likelihood to buy again from a retailer.
Customer interaction
In an online world, where interactions can feel less human, the customer experience can make or break your business. Across the APAC region, 57% of businesses say that customer experience is a top investment priority for them. This includes everything from how users navigate and engage with your website to how issues can be resolved when they arise. Globally, 90% of consumers say that quality customer service is directly tied to their sense of brand loyalty.
Make sure that contact information for your business is readily available, and consider including things like a live chat or 24/7 service to help customers feel like you are readily available to meet their needs.
Transparency is becoming more important. Knowing there is a delay dramatically reduced the amount of customer care time.
Bin Lin, CEO, Digitalmax
New Zealand Couriers customer
Top 4 tips for converting online browsers into repeat customers:
- Transparency: Make shipping and returns information easy to understand and locate on your website
- Simplicity: Make it quick and simple to make a purchase
- Trust: Don’t hit your customers with extra fees at the checkout instead be upfront with costs from the get-go
- Service: Make sure customers know how to contact you and be ready and able to resolve any issues with empathy
Automation for growth
New Zealand Couriers customer Digitalmax is 100% online. They have 50 staff in New Zealand and must deliver thousands of parcels daily.
For Digitalmax, automating the order fulfilment process was integral to keeping up with customer demand and growing the business.
“For us it takes four seconds to dispatch a parcel and for most businesses, to do it manually would take two minutes. Automation can be a game-changer for business efficiency.” – Bin Lin, CEO, Digitalmax.
Until we switched to GoSweetSpot we were using a manual system and that was really cumbersome.
Kennedy, Manager at Excellent Screen Printers
GoSweetSpot is a freight aggregator for New Zealand Couriers
#1
Improved accuracy
Orders automatically go where they are supposed to go without risk of human error.
#2
More time
Automation frees up staff resources to assist in other areas of the business where they can be better utilised.
.
#3
Efficient logistics
Systems can be tailored to integrate with your business’ wider logistics, like inventory management.
.
The recent boom
Ecommerce is showing no signs of slowing down, and Kiwi merchants are increasingly investing in ways to attract and retain customers online. Competition for online customer is heating up, and the customer experience is a critical factor in winning new customers and enticing existing customers to return.
For Kiwi customers, the delivery experience is part of the overall shopping experience. A bad delivery experience can sour their view of your brand, so expectations around delivery must be met. Communication, security, price, returns policies, and delivery options are all important factors in the delivery experience. But most of all, customers want their packages to arrive when they say they will, in the condition they expect them to be in. Reliability is the key.
Ecommerce Merchant Report 2023
New Zealand Couriers have created this report to help small and medium-sized business owners understand the eCommerce opportunities for their business
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