Consumer Insights Report MYOB Report 2019

Today, more than 500,000 locally owned and operated small businesses employ upwards of 600,000 people and contribute 28% to New Zealand’s GDP*.

These businesses are owned by Kiwis who want to earn a living doing something they love in a country that supports both innovation and development, as well as an enviable lifestyle.

In recent years however, these businesses have faced a number of new competitive challenges. The growing presence of internationally headquartered companies in New Zealand, as well as the emerging digital presence of competitors based overseas, has put pressure on small business owners, who today must not only compete with their neighbours but with retailers all over the world.

These challenges have totally transformed the sector’s relationship with consumers – who are also more digitally capable and active online than ever before.

NZ now shops onlineOur latest MYOB Consumer Insights survey shows that, in New Zealand, nearly everyone shops online. Just 13% indicated they do not purchase goods online, while just 5% of those aged under 34 said the same.

Even digital immigrants – those born or brought up before the widespread use of digital technology – are shopping online in large numbers. More than two thirds (70%) of those aged over 65 years said they head online to shop, while just 30% said they do not.

And this affects the way New Zealanders make their purchasing decisions. Whether you run a large chain of stores, or a local restaurant; if you’re a tradie or even an e-tailer, it’s important to remember that two-thirds of your customers will go to the web to research your product or service before they come to your store.

A third (30%) will even research, try-on or trial a product or service in-store before purchasing online at a later stage – perhaps from a competitor or international retailer for a better price.

When consumers do find a local business online, they’re also assessing the quality of their digital experience. In fact, the user experience of a business’ website is almost as important as the price of the product or service they’re selling. Nearly every consumer (98%) said price was important to them when shopping online, while 96% said the same about the usability and navigation of a brand’s website.

Kiwis want to buy localThe good news is that there is still a strong commitment to buy locally despite the rise of large-scale online retailers and international competitors. Kiwis are still keen to support their local businesses, even though that may mean shopping locally online via their computers and smartphones.

According to the MYOB Consumer Insights survey, more than half of Kiwi consumers (54%) always or often purchase products and services from New Zealand owned and operated small businesses – either by visiting their physical premises or heading online.

We also shop at these businesses regularly. Four out of five Kiwi consumers shop at the physical premise of a New Zealand small business at least once a month, while more than a third shop locally every week, and one in ten visit a local store most days.

This isn’t just because it’s more convenient to pop down to the local shops after work or on the weekend. Consumers also believe it’s important to shop locally because it is a way to support the community and wider New Zealand economy.

However, while Kiwi consumers want to shop locally – and have indicated that they’re still doing so regularly – our research highlights it’s not always a level playing field for Kiwi businesses.

Over 60% of consumers believe that buying from locally owned and operated businesses is actually more expensive than from international retailers. Only 12% said local retailers are more affordable. The introduction of GST on smaller international online purchases may help to remedy this for local retailers, however as competition grows internationally, consumers will be more likely to shop around for the best value their money can buy – even if it means shopping internationally.

Ultimately, it’s important small businesses take into account the importance of the digital experience. Whether it’s a user-friendly website, a social media profile with targeted content, or a quality e-commerce platform that translates across devices, modern consumers not only seek high-quality products and services, they also want to shop online seamlessly and securely.

Gone are the days of ignoring your digital presence, or lack thereof. Today, what you do – or don’t do – online could make all the difference to the success of your business.

Often labelled the backbone of New Zealand’s economy, small-to-medium sized businesses – and the people who own and operate them – play an important role in supporting communities across Aotearoa.

Ingrid Cronin-Knight MYOB NZ Country Manager

*New Zealand’s Support for Small Business, MBIE May 2018.

New Zealand’s economy relies on the success of the small to medium sized business sector. With more than 500,000 SME owners operating locally across a number of key industries, and employing more than 600,000 local people*, the country wouldn’t be where it is today without the drive of New Zealand’s hard-working business owners.

Fortunately, Kiwi consumers not only want to support locally owned and operated businesses because of the convenience they deliver, they also believe buying ‘New Zealand’ is good for the economy and the wider community.

According to the inaugural MYOB Consumer Insights Survey, nearly half of all Kiwis aged 18 to 65 purchase goods and services from New Zealand owned and operated small businesses. Of those who say they shop locally, four out of five shop at the physical premises of a New Zealand small business at least once a month. More than a third shop locally every week, while one in ten visit a local store most days.

Despite wanting to support the economy and shopping locally when possible, a majority of Kiwi consumers believe local businesses are not as affordable as international retailers (when shopping at both physical premises and online). Three in five (61%) believe local businesses are more expensive than international retailers. Just 12% see New Zealand businesses as cheaper than those headquartered overseas. A fifth say locally owned and operated enterprises sell goods and services for about the same price as international retailers.

Supporting Kiwi businesses

*New Zealand’s Support for Small Business, MBIE May 2018.

Notwithstanding the rise of online international retailers, and a growing number of larger international businesses being based here, New Zealand consumers continue to shop at local stores across the country. More than half say they always or often purchase products and services from New Zealand owned and operated small businesses. Of those that do, more than 80% say they shop locally at least once a month, while nearly half shop locally every week.

How often do you buy products or services from New Zealand owned and operated small businesses (either online or physical premises)?

Always

Often

Sometimes

Rarely

Never

Don’t know

6%

48%

38%

4%

0%

3%

How frequently do you shop at the physical premises of a New Zealand owned and operated small business or local store (small business in your neighbourhood)?

While almost a third of Kiwi consumers favour New Zealand owned and operated businesses when shopping online, more than half purchase equally from New Zealand based and international online businesses. Consumers under the age of 25 are more likely to favour international online businesses, while Baby Boomers are more likely to shop locally when buying goods and services online.

Total 16-24 55-64 year olds year olds

I always buy from local businesses 5% 0% 6%

I mainly buy from local businesses 26% 15% 37%

I buy from both local and international retailers equally 52% 52% 47%

I mainly buy from international retailers 14% 30% 9%

I always buy from international retailers 1% 2% 1%

I never shop online 0% 0% 0%

Don’t know 2% 2% 1%

When shopping online, do you buy from local New Zealand owned and operated small businesses or international retailers?

At least 3-4 times a week 11%

1-2 times a week 34%

Once every 2-3 weeks 25%

Once a month 13%

Once every 2-3 months 7%

Once every 4-6 months 2%

Less frequently 4%

Don’t know 5%

New Zealand consumers shop locally because they like to support Kiwi owned and operated businesses as well as the local economy. Convenience is also a key driver, particularly for those aged 35 to 44 years old.

Why do you choose to buy from local New Zealand owned and operated small businesses?

It’s more convenient for me54%

I like to support the local economy54%

Other3%

Don’t know3%

It’s more affordable20%

I like to support small businesses59%

Total Metro Rural Area Area

Not at all important 2% 2% 1%

Not very important 6% 8% 1%

Quite important 41% 38% 41%

Very important 32% 33% 36%

Extremely important 17% 16% 20%

Don’t know 2% 2% 1%

Total important 49% 49% 56%

Total not important 8% 10% 2%

While nearly half of Kiwi consumers feel it’s very important to support New Zealand owned and operated small businesses, 61% believe local businesses are more expensive than international retailers. Just 12% see New Zealand businesses as cheaper than international retailers. Consumers based in rural areas believe it is more important to shop locally than those based in city and metropolitan areas. However, rural based consumers are more likely to believe local stores are more expensive than those based overseas.

In your opinion, how important is it to buy products/services from local New Zealand owned and operated small businesses?

When compared with international retailers, local New Zealand brands/businesses/organisations are generally…?

A lot cheaper than international retailers 3%

Slightly cheaper than international retailers 9%

About the same as international retailers 20%

Slightly more expensive than international retailers 45%

A lot more expensive than international retailers 16%

Don’t know 6%

Total more expensive 61%

Total cheaper 12%

New Zealand owned and operated small businesses are the preferred purchasing option for eating out (84%), trade services (71%), health services (63%), automotive services (60%) and recreational services/activities (45%), while New Zealand owned and operated larger businesses are the preferred purchasing option for food/groceries (81%), furniture/appliances (69%), electronics (66%), clothing/footwear (64%), gardening supplies (63%), office supplies (55%), building materials (53%), alcohol (49%) and toys (40%).

Where do you mainly purchase the following products/services?

NZ owned small business

NZ owned larger business

Overseas owned business

Online (overseas)

Online (NZ owned)

Clothing/footwear 38% 64% 29% 26% 22%

Food/groceries 39% 81% 21% 2% 6%

Health services 63% 35% 6% 3% 8%

Eating out 84% 36% 18% 2% 3%

Alcohol 40% 49% 10% 2% 6%

Automotive services 60% 40% 8% 3% 3%

Electronics 23% 66% 21% 15% 16%

Furniture & appliances 29% 69% 17% 3% 8%

Building materials 19% 53% 11% 2% 2%

Gardening supplies 34% 63% 10% 2% 4%

Office supplies 27% 55% 9% 4% 8%

Recreational services 45% 37% 9% 5% 8%

Books 32% 32% 12% 29% 15%

Toys 23% 40% 11% 13% 13%

Trade services 71% 19% 2% 1% 2%

City/

The online experienceNew Zealanders live in an increasingly digital world. Today, nearly everyone in Aotearoa has access to, or owns, a smartphone, PC or laptop. Tablets, Smart TVs, wearable devices like Fitbits and smart home devices are also popular. In fact, one in ten Kiwi homes now have a voice-directed home device like Alexa or Google Home.

The digital era has had an irreversible impact on local retailers.

With nearly every Kiwi shopping online (87%) – including digital natives like millennials as well as older generations like Baby Boomers – promoting online, on social media and having an active online store is no longer an option for Kiwi brands, it’s a necessity. This is especially true if local businesses want to compete with international retailers.

The MYOB Consumer Insights Survey highlights the importance of the online user experience (UX) in particular, and why being searchable is critical to a brand’s success online.

While security is still the most important factor when shopping online, the user experience of a business’ website has become increasingly important to online shoppers – in fact it’s now just as important as the quality and price of goods and services sold. A majority of Kiwi online shoppers are also using search engines to find local brands and businesses. Most (88%) consumers rely on search engines like Google to research businesses and brands, while 63% rely on a business’ website. Around a third use review sites (36%) and social media platforms like Facebook (30%).

Social media is another important influence within the online shopping arena. Of those who use social media platforms to search for a business, service or product, 81% turn to Facebook, while 43% check out Instagram profiles. Younger people in particular are increasingly reliant on social media platforms to provide information about the brands they engage with. They’re also more likely to trust a business if they have a strong online presence. In fact, around a third (32%) of 16 to 24 year olds say they do not trust businesses that aren’t active online.

No matter what their age, nearly every Kiwi consumer shops online. Kiwi consumers are doing their research online – whether that’s browsing online stores, checking out social media profiles and pages, or scrolling through a business’ website for products and services before going in-store to purchase at a later stage. Younger people (those aged between 25 and 34 years old) are more likely to shop online than those aged over 65, while women are more likely to buy products and services from an online store than men.

Smartphones are the most commonly owned devices in New Zealand, closely followed by PCs/laptops. Tablets and Smart TVs are also popular, while wearable devices are becoming increasingly common among Kiwi shoppers. One in ten New Zealanders now also own a smart home device, as voice directed search becomes more popular.

While buying goods and services from an online store is popular in New Zealand, it’s very rare for Kiwis to do all of their shopping online. In fact, nearly two-thirds (63%) prefer to shop both in-store and online.

When shopping online, Kiwis prefer to use PCs/laptops over any other device. Smartphones are also common. Just a quarter (24%) use tablets to buy goods and services from online stores or apps, although these devices are more commonly used by older online shoppers.

Total

Total

Male

16-24 year olds

Female

55-64 year olds

24-34 year olds

65 years and over

PC/laptop 74% 69% 74%

Smartphone 58% 69% 43%

Tablet 24% 9% 35%

Do you shop online?

Which of the following items/devices do you own?

When purchasing products/service, do you prefer to...?

When you shop online, which device do you use?

Visit a physical store only 27%

Purchase online only 4%

Both purchase online and visit a physical store 63%

I don’t have a preference 5%

Don’t know 1%

87%

13%

84%

16%

90%

10%

95%

5%

70%

30%

Smartphone

PC/lapto

pTa

blet

Smart TV

Weara

ble device

Smart home device

None of the above

93%

66%

59%53%

10%

27%

0%

Yes No

How often do you research a product or service online before purchasing in-store?

When researching a business or brand online, which channel do you use?

Which social media channels do you generally check before shopping online or in-store?

How often do you research/try-on/trial a product or service in-store before purchasing it online?

Two out of three Kiwi shoppers research a product or service online before buying in-store, while 30% research, try-on, or trial a product or service in-store before purchasing online at a later stage. Search engines like Google are the most frequently used when researching a business online, along with the businesses’ own website. Kiwis prefer review sites over social media pages when researching a brand or product.

Nearly a third of the country uses social media platforms to research a business or brand before shopping online or in-store. Facebook is the most commonly used social media platform, followed by Instagram and YouTube. Younger consumers are more likely to check a business’ Instagram page than older shoppers, who prefer to use Facebook.

Total 16-24 year olds

45-55 year olds

Facebook 81% 67% 90%

Instagram 43% 61% 22%

YouTube 37% 30% 34%

Twitter 6% 5% 2%

Snapchat 6% 8% 2%

LinkedIn 6% 2% 7%

Other 2% 3% 5%

None 7% 6% 5%

10%

34%

24%23%

7%1% 4%

27%

46%

21%

1% 1%

Never Rarely AlwaysSometimes Don’t knowMost of the times

A search engine

88%

The business’ website

63%

Review sites

36%

Social media

30%

Other

1%

I do not research online

2%

New Zealanders consider secure payments the most important factor when shopping online, while a business’ social media profile or page is considered the least important. Price, quality and the user experience of the business’ website are also important to online shoppers.

While 50% of Kiwi consumers do not care about a business’ online presence, one in five say they do not trust a brand if it does not have an online presence such as a website, social media page or online profile. Younger people in particular tend not to trust businesses or brands without websites or social media pages.

Social media is becoming increasingly important to business success in New Zealand. Nearly half of the country follow a New Zealand owned and operated local business on social media platforms like Facebook, Instagram and Twitter. Younger generations are more likely to follow the brands and businesses they like on social media than older generations.

How important are the following factors when shopping online?

How does the online presence (website, social media page/profile) of a brand/business/organisation affect your trust in that brand/business/organisation?

Do you interact with/follow/like any New Zealand owned and operated local businesses on social media platforms like Facebook, Instagram and Twitter?

Total not important Total important

Secure payments 0% 100%

Price 1% 98%

Quality of product pictures 3% 96%

Easy navigation/UX of the website 3% 96%

Free returns 14% 85%

Free delivery 18% 82%

Shipping times 14% 84%

The business’ social media presence 58% 40%

Businesses must have an online presence to gain my trust 17% 14%

I tend not to trust a business that doesn’t have an online presence 21% 32%

The online presence of a business does not affect my trust 50% 35%

Don’t know 12% 19%

53% 34% 14%

16-24 year olds

69% 23% 8%

25-34 year olds

29% 69% 3%

65 years and over

Yes No Don’t know

Total 16-24 year olds

47% 46% 6%

Total

About MYOB

MYOB is a leading provider of online business management solutions. MYOB makes business life easier for approximately 1.2 million businesses across Australia and New Zealand by simplifying accounting, payroll, tax, practice management, CRM, job costing, inventory and more. MYOB operates across four strategic segments – Small to Medium sized businesses (SMEs), Practices (accountants, advisers and bookkeepers), Enterprise (larger businesses) and Payments. It provides ongoing support via many client service channels including a network of over 40,000 accountants, bookkeepers and other consultants. MYOB is committed to ongoing innovation and delivering efficiencies and growth opportunities for its growing client base across Australia and New Zealand.

For more information, visit myob.co.nz or follow @MYOB on Twitter.

About the survey

Survey Demographics

The MYOB New Zealand Consumer Snapshot survey was conducted using Pure Profile’s consumer panel. In total, 1,003 consumers aged 16 and over were surveyed from across New Zealand. The survey was conducted online from July 25 to July 29, 2019.

GenderLocation

Age brackets

16-2

425-3

435-4

445-5

455-6

465+

140

186166

197

155 159 Northland 36Auckland 320Waikato 95Bay of Plenty 63Gisborne and Hawke’s Bay 44Taranaki and Manawatu-Wanganui 82Wellington 117West Coast, Tasman, Nelson and Marlborough 40Canterbury 130Otago and Southland 76

Female

Male

522478