Podcast: The Detail

Imported ‘traditions’ bring a retail bonanza

New Zealand is seeing an explosion of shopping events and cyber retail days - imported from overseas. How long before we're spent out? 

New Zealanders seem to have a love-hate relationship with sales.

We moan about crowds and the consumerism as we shuffle through shopping malls with bags full of ‘bargains’. We bounce between celebrating the discounts we get and lamenting the money we spent in the first place.

Unsurprising then that an explosion of new, imported shopping days this year - Singles Day, Black Friday and Cyber Monday in particular - have been met with a mixed response.

Much of the commentary – be it in the media or water-cooler chat – comes firmly from the ‘we don’t need it’ camp.

But others have embraced the new retail trends and hit shopping malls, or online retailers, to nab a deal.

“The desire to get a bargain is a really deep-seated consumer motivation,” says Bodo Lang, the Head of Marketing at the University of Auckland.

“What [sales] really come down to is effectively retailers’ desire to move stock. If there’s a new model coming in, or if they’ve just got a lot of inventory.

“Often these sale days are literally inventions of people in the industry, and sometimes they’re linked to cultural things, but other times they’re just things made up by people in the supply chain.”

While Lang says he’s not aware of any high-level marketing meetings where random shopping days are drawn up, but suspects there’s some level of coordination between sellers.

“What you want to have for a sale is a sufficient number of retailers that participate at a sufficiently attractive price point … that really brings in the consumers and results in additional sales.”

Lang says big sales are likely to start with a “seed” from a large retailer or chain.

“If that seed is big enough, if these chains have enough market power, then other retailers will jump on it, because one of the downsides of sales if you’re a retailer is that if you’re not part of it you’re very likely missing out on sales not just during that sales period, but after.”

The arrival of new sales on New Zealand shores is an extension of globalisation, he says. Sales that trend overseas will eventually land here, in the same way pop culture or even specific products do.

“I think sales aren’t that different from television shows or movies in that sense. These ideas basically flow down through a pipeline and if they’re working overseas then retailers here will take note.

It’s hard to get a complete picture of retail spending, but Paymark – which accounts for most EFTPOS spending in-store – show sales on Black Friday, excluding hospitality and food, totalled $71.4m, up 22.5 per cent on Black Friday in 2018.

But Lang points out that not everyone loves the sales.

“I do think there’s a danger for retailers that they’ve permanently lowered their prices and thus their profitability but there’s also a danger for consumers… that they’re being constantly encouraged to consume.

“If that’s the backbone of the economy then I think that’s really problematic.”

Want more from The Detail? Find past episodes here.

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