Published on the 04/12/2025 | Written by Heather Wright

But your customers still want those sites…

Kiwi businesses are rapidly integrating AI into their online presence, using it for social media content, website setup and customer engagement via chatbots. But nearly half of businesses still don’t have a website even though consumers rank sites as the most important engagement tool.

InternetNZ’s 2025 .nz research shows 47 percent of businesses still don’t have a website, with the number even lower for sole traders, where just one in four have a site. That’s despite businesses continuing to rate websites as the most important digital channel for their success (the report doesn’t break out how many businesses without websites feel that way, versus those that already have a site).

“Nearly three-quarters of consumers say a website is the most important tool for engagement, well ahead of social media or email.”

Across the Tasman, Australian businesses show similar patterns with RockingWeb data suggesting 59 percent of small businesses (data for all business is somewhat lacking) don’t have a website, and the latest data showing just 39 percent are actually making ‘decent’ money from ecommerce.

Social reliance

The kiwi report also suggests businesses may also be overestimating the benefits of social media, ramping up their social media presence, right as consumers retreat from the platforms, ranking social media benefits much lower than businesses do.

The World Internet Project survey shows daily social media use in New Zealand has dropped from 83 percent in 2023 to 72 percent in 2025. In Australia, overall social media penetration remains high at 78 percent, but engagement growth has slowed in the fragmented environment. Australian research does show, however, that there’s still high use (58 percent) of social media for brand and product research.

The research surveyed 750 businesses and 500 consumers to see how the internet is being used to run, or engage with, businesses,

Businesses’ lack of websites apparently contrasts sharply with consumer demand. While just 35 percent of businesses see websites as a way to make sales, the report says more than half of consumers believe that’s the primary benefit of a website.

The key reason given for not having a site was the feeling that the nature or size of their business doesn’t necessitate it.

But Tim Johnson, InternetNZ general manager customer and product, says while that thinking is understandable, there’s a major flaw to it: “That’s not how your potential customers see it.”

Nearly three-quarters of the individuals surveyed said a business or organisation’s website is the most important tool for engagement, well ahead of social media or email. That difference in opinions and focus opens the doors for ‘missed connections’, Johnson says.

He says there is heavy reliance, especially for small businesses on social media but the research shows consumers are using social media less.

“The last World Internet Project report found most people think social media makes the world a worse place – it’s not necessarily the right place to pitch business now,” Johnson says.

It’s not all doom and gloom though. While an increased social media engagement is the leading change reported by businesses for their online presence in the past two years, they’re also reporting enhanced websites with a focus on better functionality, mobile optimisation and improved navigation, and increased e-commerce capabilities, driven partly by AI, which is adding another layer to the picture.

Both New Zealand and Australian businesses are embracing AI tools to streamline operations and enhance customer engagement. In Australia, CSIRO data shows around 68 percent of Australian businesses have already implemented AI technologies, with 23 percent planning to do so within a year. That’s an exact match to the InternetNZ data where 68 percent of businesses surveyed say they’re using AI.

It’s the first time the Kiwi research has asked about the use of AI and it found businesses are using the technology in a range of ways, from generating social media content to helping them set up website or using AI bots to engage with customers.

Top of the list for AI efforts? It’s largely still baby steps with AI help with writing and grammar topping the list, followed by content creation and analysing data, followed by video and image generation and customer facing websites and apps.

Chatbots for customer service also feature among business AI rollouts, along with virtual assistants to increase productivity and automation of workflows.

Live chat, including AI chat, made an appearance in the report for the first time with 11 percent ranking it as an important digital touchpoint for their success, putting it on par with CRMs, which dropped back from 13 percent last year.

Noted one respondent: “Since implementing AI, customers now talk to our chatbot more, find answers themselves and get quicker, more personal replies.” Another referenced using AI to predict trends, optimise ad campaigns and refine content strategies for maximum impact.

The InternetNZ research also shows that four in 10 consumers now expect AI chatbots to provide them with the information they’re seeking. There are generational differences, however: Don’t ask a gen-Zer (aged 18-29) to talk to a human – just one percent say they regularly use live chat with a human. But 16 percent say they regularly use AI chat. Gen Y, X and boomers all favour human chat still: Just three percent of those aged 60+ regularly use AI chat.

AI is also changing customer behaviour. Alongside the increase in customers self-serving via AI-powered tools, respondents noted a higher expectation of speed and efficiency, demand for more personalised experiences and increased after-hours engagement.