The Internet economy potential

The Herald reports:

New Zealand retailers are falling behind other sectors of the economy in their use of the internet to drive sales and business management, says a major new study funded by internet NZ and the global internet search engine, Google.

The “Value of internet Services to New Zealand Businesses” report, issued this morning, says firms using the internet well are between 6 per cent and 11 per cent more productive than their competitors in the same field. Best practice users were as much as 73 per cent more productive than average businesses in their industry.

The report suggests if all businesses were using the internet to its full potential, New Zealand’s economy – currently worth around $210 billion of output annually – could get a $34 billion efficiency and productivity boost.

Maybe retailers should stop trying to tax the Internet and should embrace it more!

The research was conducted by the economic research consultancy Sapere and used data from 5,589 businesses in the Statistics New Zealand Business Operations Survey.

It excluded firms in the information technology sector, which were presumed to be high internet users and interviews with 76 businesses were conducted in the tourism, retail, dairy/agriculture, and professional services sectors.

The report says while internet speed and connectivity were once the major issue, that is no longer so. The use to which the internet is put is the larger issue for most firms.

In the retail sector, where the common complaint is that e-commerce is robbing traditional shops of sales, the survey found retailers were “slightly lower users of internet services than businesses as a whole.”

“They are less likely to have a website, less likely to have most of their staff online, and less likely to use fibre, with bigger firms generally higher users than smaller firms.

“On our numbers, it is highly unusual for retailers to be selling a lot online at this point, with only 3 per cent of firms reporting that more than a quarter of their sales are made online, although retailers are heavy online purchasers.”

And of interest:

It reports one service provider as saying no more than one in 12 New Zealand retailers was doing a good job of integrating online and offline stores.

So huge potential there if it is grasped. The full report, for those interested, is here.