The Commerce Commission released the 2016 Consumer Issues Report last week, showing that online retail continues to rise.
According to Commerce and Consumer Affairs Minister Paul Goldsmith, the report shows that the number of online sales in New Zealand is increasing – but also subject to plenty of complaints.
“The global marketplace is increasing competition and forcing retailers to be more innovative and creative in how they market their products to consumers,” Goldsmith says.
While online sales account for 6% of retail spending, they’re also responsible for 34% of complaints to the Commerce Commission in regards to fair trading.
Complaints about online trading concerned everything from goods (26%), price (25%), provision of online services (20%), and non-intention to supply (5%).
Furthermore, 86% of complaints were against domestic traders.
“It is important to remember that even though there may not be a physical shop for a consumer to return to, New Zealand online retailers are still subject to the Fair Trading Act and Consumer Guarantees Act,” Goldsmith says.
He explains that changes made to New Zealand law in 2014 require online sellers to disclose if they are in trade, so potential consumers can be assured that the Fair Trading Act and Consumer Guarantees Acts apply.
The report cites the BNZ Online Retail Sales Report, which found that annual online sales are now worth $3 billion. Domestic retailers account for 58% of online sales, showing that the burgeoning national ecommerce trade is booming.
Electrical and electronic goods accounted for 14% of the total online spend in 2015.
The report also found that the online retail environment is increasingly becoming an on-demand space, with 21% of tablet use occurring while shoppers are in bed.
A further 44% of shoppers use smartphones to find the best price while in-store, and 35% of shoppers are willing to share information in return for personalised deals.
The report points out that Google has demoted websites that are not mobile-friendly, putting an emphasis on the importance of adaptable websites.
The report also suggests that retailers should consider an online strategy, particularly as 80% of consumers trust online reviews.
However, it pays to be wary of using Facebook as a marketing tool. The report found that last year 158 complaints were made to the Commerce Commission about Facebook sales, however it only accounts for 3% of all complaints.
Goldsmith urges consumers to find out about their rights by visiting consumerprotection.govt.nz.