KEY POINTS:
The Warehouse is re-entering the online market as it seeks to carve itself a slice of growing internet shopping spending.
The first phase of the company's plan to become a multi-channel retailer starts on August 6 with a redesigned website featuring product information on 7000 items, and additional features such as birthday alerts and a gift-finder service.
General manager of marketing Stuart Yorston said customers would be able to order merchandise online in 12 to 18 months.
"We're watching what's been bought online in New Zealand outside of the Trade Me arena - it's growing and we think The Warehouse needs to be in that space."
The move marks a return to e-tailing after an unsuccessful online venture in the late '90s selling goods available only at the downtown Auckland store.
Yorston says The Warehouse's existing website draws more than 50,000 unique visitors every month - mainly to view the company's promotions mailer - but expects numbers to grow as more features and products are added to the site.
The New Zealand Online Retail Monitor 2008 report from Nielsen Online found a total of $1.7 billion was spent on the internet in the first quarter of this year, more than four-fifths of it on New Zealand sites.
Airline tickets made up more than half the total, at $900 million, but purchases of books and magazines ($362 million) and clothing ($315 million) were still large. The proportion of those aged 18-plus who have shopped online has increased from 9 per cent in the first quarter of 2001 to 43 per cent in the same quarter this year.
Senior analyst Tony Boyte said one of the barriers to online retailing was the delivery of physical goods.
"Sometimes there are items that people just prefer to be able to see and touch and feel, and also in some cases, they want to be able to talk to someone face to face [about the product]."
Retail analyst Tim Morris, of Coriolis Research, said The Warehouse had some complicated logistics to overcome.
"Internet retailing in New Zealand is behind where it is in other countries, and that's got nothing to do, I think, with the innate willingness of New Zealanders to buy things online. I think where it falls over is in the execution."
A population of four million made scaling the online operation tricky.
"There's really not a lot of good models in New Zealand for New Zealand-based companies doing everything right, especially as you get closer and closer to moving real things, not just nominal things like airline tickets."
But Morris said The Warehouse had a reputation for strong distribution and logistics.
RETAILERS
With online shopping
* Noel Leeming
* Hallensteins
* Smith & Caughey (limited offering)
* Whitcoulls
Without
* Harvey Norman
* Glassons
* Farmers
* Borders
