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COVID-19: Kiwi Consumers To Benefit From Increased Competition At Level 3

Online retail sales have seen an immediate lift following the Prime Minister’s announcement the country would move out of Level 4 lockdown.

The move is set to benefit consumers by providing more competition in the market and reducing prices according to a local retail marketing consultant.

New figures from online mattress retailer Ecosa, show there was a noticeable jump in purchases on Friday when the Government signalled the pending change in lockdown status and again yesterday, with Tuesday confirmed as the transition date for many businesses.

Retail marketing consultant Sarah Dunn says competition in the market is essential particularly from smaller, more dynamic retailers who are able to offer a wide array of products.

"Consumers right now are shopping with only a very few large businesses, with many feeling frustrated and financially vulnerable,

"As a result, we are seeing a retail climate with more sensitised shoppers on the lookout for price gouging - which can be an additional challenge for businesses to navigate,

"When small businesses re-enter the game, they'll reduce this tension between shoppers and retailers by increasing consumer choice, rebalancing the market and rebuilding that trust element.

“What remains to be seen is the long term impact of permanent business closures on the level of competition in the market,” she says.

Ecosa spokesperson Emma Edwards says the impact of the COVID-19 has been tough on their New Zealand registered company which although meeting the definition of an ‘essential goods provider’, was unable to trade due to the requirement for the owner to have a Realme login.

“Despite being an online-only retailer, selling products which were deemed essential such as sheets and blankets and having a warehouse distribution model that met all required hygiene and social distancing standards, our company has been closed up until now as the owner does not have a New Zealand passport - which was necessary for MBIE approval.

“This has been an incredibly frustrating time for businesses like ours during Level 4 as the site traffic has been up significantly but we haven’t been able to convert the sales due to the uncertainty around delivery times.

“The effect on this has been a reduction in consumer choice as well as a reduction in tax revenue for the economy,” she says.

Edwards says they are immensely grateful to be able to resume trading, particularly in an environment where many businesses remain closed.

She says they had an increase in web traffic of 66% and a lift in sales of almost 200% since Monday’s announcement now have hundreds of thousands of dollars in backorders which will all be shipped next week.

Dunn says it is important that businesses communicate with their client base at this time to allow customers time to plan their purchases.

“In the rush to reopen the doors it is critical that companies keep their customers updated as to when they will open and what constraints they will have on trading - it is an education process for hundreds of thousands of Kiwis that will be experiencing a new retail environment for the first time.

“This allows consumers the opportunity to work through what a transaction might look like under the Level 3 constraints and whether they need to make allowances for extra time or changes to payment options.

“In particular businesses need to look at updating their social media platforms, Google’s My Business listings and also at creating a newsletter for their database,” she says.

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