Online shopping set to soar

Photo / Kenny Rodger

Online shopping in New Zealand is about to boom to $1 billion a year but DVD rental stores, book shops and appliance stores may start to struggle, a retail consultancy firm has predicted.

In its November issue of Retail Examiner, RCG (Retail Consulting Group) states that books, stationery and appliances were popular online purchases in a trend about to take off even further.

RCG's executive chairman Paul Keane said that, based on interviews with more than 100 retailers nationwide and research on overseas trends, the firm was predicting online shopping would grow by 25 per cent a year for at least five years.

The firm says its research is based on publicly available economic data surrounding internet retailing in New Zealand.

"We predict that online retail sales in New Zealand will hit $1 billion in the next five years and $2 billion by 2020."

Mr Keane said the online sale of books, DVDs and appliances could mean a change on New Zealand's retail landscape because retailers would not need such large stores.

He said the movie rental industry underwent changes when video tapes were replaced with DVDs, with outlets needing less space.

Now that DVDs were online some video outlets would close.

"People are going to become more confident ... people won't be afraid maybe to buy a major home appliance on the web as opposed to now.

" People are still a bit nervous and I think that's why we're a bit conservative in this country. We'll become a bit lazier and we'll become a bit more confident and I think those are the key factors," he said.

"Large format retailers who sell bulky items are going to consider whether or not they are able to sell some of those bulky items either online or online in-store."

Mr Keane said retailers needed to be aware of and part of the trend rather than afraid of it.