City and harbour
A socio-economic perspective

The rise of eCommerce is challenging retailers: it’s changing the way consumers shop but on a more fundamental level, it’s altering our economy. To uncover just how, we talked to Economist Cameron Bagrie about the impact online shopping is having on our culture.

Cameron: “In the first instance, online shopping is bringing convenience, it’s bringing choice, it’s saving people time and effort, and probably the most important thing for a lot of people is that it’s saving them money.”

But it’s a bit of a double-edged sword. This easy access to products is encouraging a spending culture – particularly amongst the younger generation or, as Cameron calls them, the Freddie Mercury ”I want it all. And I want it now” society.

Financial payment schemes like Buy Now Pay Later (BNPL) are perfect for this generation but these products also have the potential to create problems of debt and that’s something Cameron thinks we need to keep a close eye on.

This generation has high expectations too. They expect to have their purchases delivered in days. Being told by a traditional bricks and mortar store that they can have something in three weeks is simply not going to cut it. You are up against big international, technology-led companies who can have it to you in days.

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Credit cards still get the top mention when it comes to paying for online shopping (88%), followed by PayPal (60%) and internet banking (59%). Awareness of new BNPL options is growing with more shoppers trialling them over the last year. However, almost half of shoppers still feel unsure about how credible these payment options are.

Source: NZ Online Shopper Survey 2018

“Amazon is coming and it will bring disruption that has the potential to hurt just about every retail sector. That doesn’t mean traditional bricks and mortar is a dead duck: it means we have to be far more innovative, flexible and adaptive. There’s no point having that good old-fashioned Kiwi attitude of ‘She’ll be right’, because it won’t be. Business needs to take risks by adapting, by shifting platforms – because doing nothing is the worst risk of all,“ says Cameron.

So many New Zealand businesses need to reinvent themselves. They will need to find better ways to connect and become meaningful to consumers.

Cameron points to cinemas. A few years ago people were saying cinemas were finished thanks to another digital disrupter - Netflix. But they repositioned themselves as entertainment – offering bigger seats and the ability to take a drink in, and they are doing well. A lot of what we do simply comes down to mindset. Another good example is retailers looking at international trade as a big barrier – which, according to Cameron, it’s not.

Cameron: “If you’re a New Zealand retailer, say in Dunedin – the odds are there might be someone in Auckland buying your goods. What’s the difference between supplying goods to Auckland, and supplying goods to Sydney? Nothing at all. We just think it’s a barrier, when in fact it’s an enormous opportunity.”

Finally, one piece of news that should hearten New Zealand retailers is the closing of the GST loophole that currently gives the international retailers an edge. From October 2019, foreign companies will be required by the IRD to become registered and to collect GST on goods under $400 – making overseas products less desirable. Cameron predicts the impact on the economy will be a boost to local New Zealand retailers and a windfall tax collection of some $57 million in the first year. 

Cameron Bagrie


Cameron is a familiar face to many New Zealanders, appearing frequently on television to give his views on the economy. For over 11 years he was the Chief Economist at ANZ, heading a team that was consistently ranked No. 1 for its analysis of the New Zealand economy. He developed a reputation for taking a forthright stand on even the hardest of economic issues. He’s also worked as an economist at the National Bank, Treasury and Statistics New Zealand.

Cameron Bagrie


Continue to Section 4.0:    The sectors


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