Debuting just 14 months after its inception, TheMarket allows New Zealand shoppers to buy online from third-party retailers and suppliers. Offerings include products from more than 1,500 international and niche brands, with a strong local presence including Kiwi favourites Karen Walker, Barkers and Città homewares. Citta COO Emmett Vallender is reporting early success: “So far, we have seen new customers buying our product via TheMarket who haven’t purchased with us before.”
Offering electronics, books, toys, homewares and more, TheMarket features a wider product assortment than the The Iconic, which deals only in fashion apparel and footwear. The country’s other leading marketplace, Fishpond, doesn’t sell much in the way of clothing and focuses primarily on deals, so TheMarket aims to bridge that gap. TheMarket also boasts 30 click-and-collect locations, called MarketPoints, with plans to increase to 300 nationwide.
A New Era for New Zealand
For the uninitiated, The Warehouse Group is New Zealand’s largest retail group, with consumer brands including The Warehouse, Warehouse Stationery, Noel Leeming, 1-Day.co.nz and Torpedo7. TheMarket is part of the group’s long-term digital growth strategy, aimed at getting Kiwis to catch up with the rest of the world when it comes to online consumerism.
The site cost $12 million NZD to build and isn’t expected to turn a profit for three or four years, says Warehouse CEO Nick Grayston, formerly of Sears and Footlocker. But the seasoned executive is seemingly unflappable about the prospect: “We already sell to 3.9 million out of 4.8 million New Zealanders. We already have good personalised data through our different loyalty programs. This is about extending our reach.”
With Bunnings and Briscoes encroaching on product categories that have traditionally belonged to The Warehouse and talks of IKEA, Costco and off-price retailer TK Maxx coming to New Zealand’s shores, The Warehouse has been forced to innovate to claw back market share. One such strategy has been its successful “Red Rack” section, selling discounted name-brand goods, including Nike, Puma, Superdry and Fenty by Rihanna.
Like Amazon… but Not
TheMarket’s point of difference from Amazon is that, being a more upscale curated experience, brands have some control over how they are displayed. There’s also a blog section, called Discover, and an Instagram-like Shop Social feed that links users directly to the featured product for purchase.
Because TheMarket doesn’t actually hold any inventory, current delivery costs can vary widely as orders are fulfilled by the stores themselves, though TheMarket plans to offer a subscription that covers free shipping and returns à la Amazon Prime, with rewards for frequent shoppers. But the upside is that TheMarket is locally owned, supporting local businesses and purportedly taking a lower cut from the retailers it features, particularly helpful for smaller boutique brands.
Further leveling the playing field, in October, the “Amazon tax” will come into effect, which means that goods under $400 purchased from overseas will be subject to GST of 15%, just like all goods bought in New Zealand.
According to Retail NZ, online shopping made up just 8% of $92.3 billion spent on retail in 2018—unsurprising, given the dearth of local options and the exorbitant cost of shipping halfway around the world. (For comparison, the UK figure is 18%.) But New Zealand’s online spending is projected to reach 13.1% by 2030, and The Warehouse Group is positioning itself to take advantage of that growth, drawing upon its rich data set to offer personalised promotions and product recommendations.