Quarter three 2021 (Q3 21) was not surprisingly a big quarter for online shopping, thanks to lockdowns significantly reducing shoppers’ access to physical stores. An online spend of $1.78b was a massive 22% increase on the same quarter last year. In comparing to last year, we shouldn’t forget that Q3 20 was also impacted by lockdowns and saw sale figures elevated as a result. If we compare online spend to the same quarter two years ago (Q3 19), we see an increase of over 50%.
Q3 21’s $1.78b online sales is the biggest quarter since we started monitoring the markets over three years ago. Putting this in context, Q2 20, which saw an online sales spike due to the first nationwide lockdown, had online retail sales of $1.6b. Q4 20, driven by multiple big sales events and the Christmas sales peak, had online sales of $1.57b.
The percentage of total retail from online has been steadily rising, from around 10% two years ago, to this quarter accounting for 14% of all retail sales. No doubt the prolonged closing of physical retail stores was a big contributor to this. Offline (in-store) spending for the quarter was 12% down on the same quarter last year and 4% below Q3 19. Despite lockdowns, year-to-date physical spending is still up a healthy 4% on last year.
Online year-to-date spending is up 13% on the first nine months of 2020. This represents over half-a-billion dollars more spent by Kiwis online so far this year compared to last year. Comparing this to pre-Covid days in 2019, we see spend online in the first nine months of this year is 44% higher than two years ago.
Based on how we are tracking after three quarters, and with lockdowns still impacting physical retail spend, and the big sales days still ahead of us, we continue to forecast that 2021 will exceed $6.6b annual online spend. That’s around 14% above 2020’s spend numbers, a year that was already 25% higher than 2019.
The drivers of growth
In each eCommerce Spotlight edition, we look at the three key factors that drive online spending – the number of shoppers, how often they shop and how much they spend each time.
There can be no doubt about what was driving growth in Q3 – transactions. There were over 17.26m transactions online this quarter. That’s nearly 4 million more than the same quarter last year – a 29% rise. Growth in transactions is also the key force behind the year-to-date growth, with 45m transactions so far this year, up 15% on the same time last year. That averages out to over 165,000 online transactions per day!
The quarter’s shopping drivers reinforce a couple of key trends we’ve seen all year. The total number of customers online was slightly down on this time last year, and has remained relatively steady, at just over half the adult population of New Zealand, throughout 2021. Despite the total shopper number being flat, there were 20% more first-time shoppers than in the same quarter of 2020. The second trend is that online shoppers are spending less on average each time, but shopping with much greater frequency. The average basket size was $103 this quarter compared to $110 in the same quarter last year. Offsetting this is the increasing number of times shoppers are buying online each quarter – on average 8.2 times. This figure was 6.3 in the same quarter last year.
Over the quarter, shoppers averaged $849 online spend, $155 (22%) more than the same quarter a year ago.