COVID-19's Impact on New Zealand Consumer Behavior

COVID-19 has resulted in unprecedented global health, social and economic disruptions. With social distancing measures initiated, New Zealand consumer habits have been forced to adapt to a COVID-19 world, affecting what we buy, how we purchase goods, and how much we spend.

COVID-19 has caused kiwis to become more conscientious of their spending. After the initial March 2020 lockdown, a University of Otago survey showed that 43 percent of respondents reduced their total consumer spending and 52 percent started to shop locally. Brand switching was also key, with 33 percent trying a different or local brand, and 38 percent engaging in less expensive brands. Therefore, COVID-19 has pushed economic nationalism into the consumers psyche, preferring to support domestic rather than international businesses. However, a large proportion of Kiwis made the most of the lockdown, with 35 percent of consumers increasing their savings and 26 percent decreasing debt.

One of the major consumer behaviours to have changed in the COVID-19 era is in the digital shopping space. Online retail searches increased after the March 2020 lockdown and remained high entering into 2021. However, after the second lockdown in August 2021, retail search volume increased by 27% Year-on-year (YoY). The category of items searched has also changed compared to pre-COVID-19 searches. Historically, clothes, consumer electronics and computers experience the strongest demand in search volume. However, toy searches experienced the strongest growth (+61% YoY), followed by house furniture then household supplies.

These trends are not surprising as NZ consumers have increased their amount of time spent indoors by more than 20% since the pandemic began. In consequence, purchases are more likely to cater more to their indoor lives. Unsurprisingly, search categories befitting outdoor behaviours, such as sports gear and make-up, saw the weakest growth in search volume. These trends are not unique to New Zealand. U.S. consumers have cut back their spending across most categories, excluding groceries, household supplies, and home entertainment, as with nearly half of all UK consumers.

Overall, kiwis have reduced their spending habits on restaurants, outdoor entertainment and expensive branding, whilst redirecting their disposable incomes either into their savings or ‘at home’ spending, albeit through online-purchases.