Red Sheds chase online dollars

Ian Morrice says customers spend more online. Photo / Richard Robinson

The Warehouse believes its new online retail service will boost customer spending.

Launched yesterday, the Red Sheds' online shop will initially offer top-selling products in its most popular categories - books, music, movies, gaming and gift cards - but will expand into electronics and jewellery shortly with additional products rolled out over coming months.

Chief executive Ian Morrice said bricks and mortar stores and an online service supported each other, with customers who shopped online tending to spend more.

"So the more convenient you make yourselves to people as a retailer by having online and the stores, it actually drives up the spend level."

He said faster and greater availability of broadband had been a "breakthrough" for New Zealand retailers, making online retailing a viable option. He said it was inevitable that all major Kiwi retailers would become multi-channel.

It was also an extremely cost-effective way of selling - setting up the online trading facility had cost about the same as refitting one Warehouse store, he said.

Shopping online but picking up in the store had proved extremely popular in the United States and Britain, and The Warehouse would eventually offer that service.

The chain also saw an opportunity to sell products that it could not currently supply in its stores.

Products such as garden sheds or spa pools, for example, were in high demand online but difficult to retail in-store.

"When it's online then the customer can get the best possible price," said Morrice, "because you don't have to make the investment in stock and space that you have to make in your store."