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The Rise of Agri E-commerce.

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Executive summary

E-commerce is a fast-developing sales channel, on which the agricultural sector was a long way behind. This project looks at the growth/opportunities for e-commerce operations for agricultural supplies businesses. The willingness of farmers to use online stores to make farm input purchases is now very high (83.5% in favour of using e-commerce), and now many Agri supplies businesses are ready to offer this to their customers.

Literature was examined to understand key aspects of e-commerce, and key businesses were identified and interviewed to gain insight on e-commerce in agriculture. From the interviews, themes were identified and analysed to answer the study questions. In addition, a farmer survey was run to get the farmers’ thoughts on the use of e-commerce.

The key learnings of this project were:

  • There are still some real issues with rural internet connectivity. Although rural internet access is high, the quality of the internet is very poor (speed) making it difficult for some farmers to operate with Ecommerce.
  • Agriculture supplies businesses were able to respond quickly with e-commerce options during lockdowns, which helped them maintain turnover.
  • The pandemic accelerated ecommerce activity within the agricultural sector.
  • The presence of an online store helps existing “bricks and mortar” businesses to better serve its customers (omnichannel).
  • Some positive environmental outcomes resulted from increased e-commerce retail (reduced greenhouse gas emissions and less physical retail space required)
  • The willingness of farmers to use e-commerce options when purchasing farm inputs has increased. COVID 19 was a major driver of this, as well as some of the benefits (convenience, time saving) that it can provide.

The recommendations from this project are that –

Agricultural Supply Businesses:

  • Prioritise physical and online store (omnichannel) offering. Ensure farmers receive connected human and digital interactions.
  • Measure and monitor customer experience metrics to ensure their online sale platforms are performing and fit for use.
  • Follow Agri e-commerce developments overseas to apply potential opportunities for New Zealand.
  • Attract farmers with development of clever marketing and advertising ideas, especially to grow and maintain customers.

Farmers

  • Explore e-commerce options, as online stores offer a much better service than they did a year ago, let alone five years ago.
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