Key takeaways from the latest Q1 2023 e-commerce report

The most recent Q1 report from NZ Post is out! Here’s a summary and my thoughts on what this means for businesses in 2023.

There was a 22% drop in online shopping in Q1 2023 vs the same period last year. 60% higher than three years ago pre-pandemic and also in line with Q1 2021. The ‘high of 2022’ can be attributed to COVID fears as the more transmissible Omicron hit our shores and ongoing lockdown restrictions/mandates kept people away from stores and shopping online but its been further compounded by an arguably tougher economy.

With inflation hovering around 7% and a dramatic increase in the OCR from 2-5% has put pressure on Kiwi’s discretionary incomes as steep mortgage rate increases and falling house prices have led to fewer shoppers online, buying less often and spending less each time.

The sectors most affected were:

Homewares, Appliances and Electronics -33%

Specialty Food, Groceries and Liquor -25% (driven mostly from non-essential spending in liquor -40%)

Health and Beauty -13%

A key insight behind these declines is in some cases there were increases in in-store spending for these sectors (except Homewares, Appliances and Electronics which was also down 15% – OUCH!) as shoppers had the ability to go back in store for a tactile shopping experience.

Another key takeaway from this report pointing to the decline thanks to tougher economic times is the relentless rise of ‘buy now, pay later’ options. Its 3 times the levels of Q1 2020. 

Keen to read the report in full? Click here to check it out.

So, what does this mean for e-commerce businesses in 2023? My take is that it will be realistic to expect to see a small decline in YOY sales. If shoppers are purchasing online less often, make those purchases count with incentives and added value to drive higher average orders.

LOVE, LOVE, LOVE on your existing and loyal customers, maybe offer them something early before the public or some other type of special offer that makes sense for your business. Or when they next order pop some extra to “surprise and delight” them. Harness their support of your business and ask them for google reviews or to spread the word and their love for your business. Don’t be shy about this. Your advocates want to see your business thrive!

I don’t need to tell you to suck eggs that in a recessionary time businesses need to be flexible and ready to adapt to changing consumer behaviours. It’s time to get proactive, creative and front foot your business decision making. I’d start by looking for insights in your customer behaviour by listening (and learning!) from what they are showing and telling you and diving deeper into your website analytics.

I’d love to hear from you about any noticeable trends you are seeing so far this year and what you are doing to navigate it.