Interestingly, Homewares, Appliances & Electronics has had a particularly strong period in lockdown, when you consider it in the context of the rest of the year where growth has been a modest 8%. The sector saw the same growth spikes during lockdowns in 2020, as Kiwis looked to improve the place where they spent so much more time.
Auckland drove the strong performance of these three leading sectors. In Auckland, Clothing & Footwear was up 139%; Homewares, Appliances & Electronics was up 114%; and Department, Variety & Miscellaneous Retail was up 141%.
Nationally, for the first ten months of 2021, it’s Clothing & Footwear (31%); Department, Variety & Miscellaneous Retail (24%); and Recreation, Entertainment, Books & Stationary (20%) that have shown the highest levels of growth. Health & Beauty, at 7%, has seen the lowest levels of growth.
Buy Now Pay Later also continued to grow strongly, with a monthly increase of 62% compared to October 2020 and 133% compared to October 2019. 2021 has been a big year so far for deferred payment services, up 40% on the same period in 2020.
November is traditionally a big online sales month with Singles Day, Black Friday and Cyber Monday sales events, plus the start of Christmas promotions. Despite the challenges with stock delays, processing volumes, and timely delivery, we are still seeing retailers embrace the sales opportunities ahead. Already we see a trend emerging with many retailers running ‘sale weeks’ or ‘sale month’ instead of the traditional ‘sale days.’
The limited opening of physical retail in Auckland (Alert Level 3.2) is a welcome relief for many shoppers, especially those who enjoy a physical in-store experience. Despite open stores, we expect online sales numbers for November, and the rest of the year, to once again reach new highs.
We anticipate that annual online spending will reach around $7.26 billion for 2021. That’s about 25% higher than 2020, which in itself was 25% on 2019.
Retailers, suppliers, delivery partners, and other industry players are gearing up for these unprecedented volumes but increased strain on the supply chain will no doubt lead to more frustrations for all involved. A little patience will be needed at all stages of the purchase process.
Note: To help you stay up to date with what’s happening during this period of unprecedented online growth, we will produce another eCommerce Spotlight update in December. We’ll then produce our regular quarterly update of online spending in January 2022.