Christmas has always been an important time of year for Kiwi consumers—and the businesses they buy from. However, 2020 has seen the mindset and behaviour of many New Zealanders shift. Over the last nine months, nesting has come to the fore as people sought to improve the comfort and functionality of their homes. We’ve seen a resurgence to buy local, and a normalisation of flexible working brought on by necessity.
The question is, how much has Covid-19 reshaped the psyche of the New Zealand consumer?
This is what our team at Perceptive set out to study; the attitudes and behaviours of New Zealanders as the country recovers from the coronavirus. And what better way to highlight the shifts society has gone through than to explore busiest retail period on the calendar: Christmas.
Our study is two-fold. First, we conducted a survey (reported here) to uncover how New Zealand consumers intend to spend during the Christmas period. Stage two will start in January when we deep dive into transactional data from Paymark—New Zealand’s largest electronic transaction provider—to unpick actual spending behaviours. In particular, we'll seek to understand how both the pandemic and the Christmas mindset impacts Kiwi spending behaviours.
“Paymark provides EFTPOS and eCommerce solutions for over 70 per cent of New Zealand businesses; it has the largest transactional data set in the country. Combining Paymark’s data with our customer intelligence gives us unprecedented insight into how Kiwi consumers are truly behaving and, most importantly, why,” says Daniel Shaw, Managing Director of Perceptive. “What we’re presenting here is the first step to understanding the short- and long-term impact Covid has left on the consumer mindset.”
Here is what we've uncovered so far.
30 per cent of New Zealanders will spend less this Christmas
While 30 per cent of New Zealanders plan on spending less this Christmas, 48 per cent claim they’ll spend the same and 18 per cent say they’ll spend more.
Aucklanders feeling the pinch
Of the 30 per cent (approximately 1.5 million Kiwis) who say they’ll spend less, 48 per cent cited financial hardship as the main reason while 47 per cent said they need to save to other purposes and 41 per cent simply want to have a more ‘low key’ Christmas. Perhaps unsurprisingly, this group is more likely to be living in Auckland with 34 per cent cent of Aucklanders saying say they intend to spend less this Christmas.
“Auckland has been hit particularly hard by the pandemic,” says Daniel. “Businesses across the region endured two lockdowns while the Auckland CBD, home to 14,000 businesses, was also shut down for a weekend in November.”
That's not to say the impact of Covid hasn’t been felt elsewhere. Over half of this ‘spend less’ group attribute Covid-19 as at least one of their reasons for tightening their purse strings. Moreover, 12 per cent are having smaller gatherings due to loved ones being stuck overseas.
To save money and spend less, this group plans to:
- Keep the food simple and not over the top (64 per cent).
- Put a price or quantity limit on gifts (53 per cent).
- Take advantage of sales before Christmas (43 per cent).
Younger New Zealanders plan to spend more using alternative payment methods
At the other end of the spectrum, 18 per cent of New Zealanders (approximately 918,000 people) are planning on spending more this Christmas. These New Zealanders tend to be younger, aged 18 to 34 years (29 per cent) and living in shared flats with friends (38 per cent).
The top three reasons why this group plans to spend more are:
- It has been a tough year and people deserve a good Christmas (39 per cent).
- I want to spoil my loved ones with gifts (34 per cent).
- I am in a better financial position this year (27 per cent).
Young Kiwis aged between 18 to 24 are also more likely to use alternative payment methods to enjoy Christmas. Compared to last year:
- 27 per cent plan to use in-store and online layby.
- 15 per cent plan on using their credit card.
“This shift towards layby and credit card highlights how buyer behaviour is changing with the growth of new technology and financial platforms in the last few years,” says Daniel. “Platforms such as Laybuy and Afterpay are having a big impact in the eCommerce space. Younger generations are quicker at adopting and adapting to new technology, hence this skew showing among younger Kiwis.”
Almost a quarter of New Zealanders intend to spend more on groceries
Category wise, most New Zealanders are planning to spend the same across the various retail categories. However, 24 per cent plan to spend more on groceries this year, this group will also spend more across the board.
On the flip side, Kiwis plan to spend less at bars and restaurants (36 per cent), and on electronic goods (33 per cent), clothing (33 per cent), and footwear (33 per cent). Those who say they will not spend in these categories are also cutting their spend across all categories.
“This insight shows the disparity of outcomes of the pandemic. Some Kiwis have come out of the pandemic still able to have a comfortable Christmas, however, a significant proportion are still feeling the impact of Covid-19,” says Daniel.
More Kiwis move to shop online
Over one-quarter of Kiwis (roughly 1.3 million people) saying they plan to shop mostly online this year. Of this group, 33 per cent (approximately 429,000 people) did not shop online last year, which indicates a significant shift in mindset compared to twelve months ago.
New Zealanders aged between 25 to 34 years are most likely to shop online (43 per cent) along with Aucklanders (35 per cent) who are eager to skip the crowds. Convenience, avoiding crowds, and a slight reference to the pandemic were the most cited reasons they chose to shop online.
The buy local trend is still going strong
Well over half of New Zealanders say they’re more focused on buying from NZ Made stores/local retailers this year compared to last year. While this opinion is held relatively evenly among females and males, 18 to 24 year olds were significantly more likely to focus on this. The most common reasons for shopping local are to help New Zealand businesses after Covid-19 and to avoid longer wait times on overseas items.
A lot of us are organising early
Forty-one per cent of our respondents said they have either bought gifts already or they are planning to buy them earlier than last year. Bear in mind this survey was conducted mid-November!
“Curiously, we expected the reasons for starting Christmas shopping early would center around impacts from Covid, such as a slow delivery of goods, especially from overseas, and the desire to get in early in case another lockdown occurs,” says Daniel. “In reality, it mostly came down to New Zealanders wanting to be organised and to get their Christmas shopping done and dusted. That said, 49 per cent of those who have shopped early or plan to also said it was to help spread out the cost.”
Despite the year we’ve had, these figures suggest that while most New Zealanders have bounced back from the pandemic, a significant number of Kiwis have been adversely affected by the pandemic. While Perceptive can only report on consumers intentions at this point, after Christmas they will return and explore Paymark’s transactional data over November and December to understand whether consumers actually spent as they intended.
“In January, we’ll have the hard data to see whether consumer behaviour marries up to consumer mindset,” says Daniel. “We hope that businesses can take these insights and use them to fuel their post-Covid recovery into 2021 and beyond.”
About the survey
Perceptive conducted an online survey that collected n=1,003 responses from New Zealanders using a nationwide sampling framework. The results were then weighted to Statistics New Zealand census gender, age and location to give a representative sample of the population.
To help New Zealand businesses harness transactional data, we've created Ada—a fully-visual, self-service dashboard for businesses to explore and analyse how their customers spend. Get in touch for free 30-minute demo.