Christmas online tips for retailers - Net.Matters - September 2009

There is mixed opinion amongst analysts as to how this Christmas will fare compared to 2008 - but most agree year on year growth may not be as high as last year, although more customers are likely to visit retail websites for research purposes to get the best possible price.  The number of visitors and transactions are likely to increase, but the value of purchases may be down on last year.

As Alex Burmaster, Nielsen Online's communications director was quoted as saying in the RetailWeek article:  “In terms of visitors we are expecting it to be the biggest Christmas yet, but it is difficult to say on volume and value.”

This is reiterated by Peter Fitzgerald, Google retail industry leader: “There is going to be a lift year on year.  I'm very confident in that.  The average order value has trended downwards for a long time, but sometimes this just means consumers are purchasing more often.”

Analysts predict consumers are likely to leave transactions until well into December this year - and looking at 2008's parcels volumes for the Home Delivery Network (HDNL), retailers should take heed.  Paul Mohan, HDNL's operations director told RetailWeek: “Last year we found that Christmas came sharper and later.  In the last four weeks of 2008 we delivered about 500,000 more parcels than in the previous year.  The busiest week was a week later and the busiest day was four days later than the year before.”  And he adds: “The most important lesson learned from last year is that a partnership approach is needed to deliver a better service.”

Whether Christmas 2009 is going to be a bumper year or not, online retailers should be making preparations now for the Christmas rush:

1. The 25th is a Friday this year - chances are, consumers will leave some shopping until the last possible moment - retailers should gear up for delivering Christmas Eve and making the most of in-store collection facilities for reserved items.
2. With VAT rates reverting back to 17.5% from 1st January 2010, retailers should bring forward their sales to Christmas Day.  Last year saw a surge of consumers embrace the idea of shopping on this day when major retailers launched their January sales on the 25th.  This trend is likely to grow.  If you are planning a sales promotion, ensure your delivery partner is made aware now and not with a week to go.
3. Consumers generally research for gifts over weekends, making Monday typically the busiest day for online transactions.  According to comScore, 35% of online retail spend is conducted from a workplace (yet only 25% of web research is carried out at work).
4. Start the countdown to Christmas now - statistics from Google show in 2008, online research for Christmas gifts started back in the August and gathered pace in September.
5. Make sure your website is attractive consumers - customers are more likely to shop online if they can see a retailer's entire product catalogue; opt for free delivery; benefit from specified delivery times; and interact with a site simplifying registration and checkout processes.
6. In-house, retailers should be looking at their internal processes - how many of your deliveries will be overseas; manpower needs and warehouse resources; management of returns.
7. Organic marketing activity and pay per click advertising - the most successful retailers over 2008's Christmas period, adapted their marketing strategy on a daily rather than weekly basis.  Modifying site content on the back of current statistics will give your site the edge.
8. Utilise the reach of price comparison shopping sites by providing them with as many facts as possible about your promotion.  Include sales prices and delivery times as well as comprehensive product information.  Be mindful of merchant and consumer reviews of your products - and quickly respond to any negative publicity.

And if August's online shopping figures are anything to go by, than the online retail market is still going to frantic this Christmas.  The IMRG Capgemini e-Retail Sales Index has released new figures for August, showing a 16% year on year increase from August 2008, with UK shoppers spending £3.8 billion online last month.  The chart below confirms where consumers spent the majority of their cash - the beer, wines and spirits sector and the lingerie sector were the hardest hit, as consumers, to some extent, continue to opt out of the luxury markets.

Tina Spooner, Director of Information at IMRG comments:

“The seasonal monthly dip in web sales is in line with similar trends seen in recent years for the month of August and the yearly growth of 16% is actually higher than recorded in August last year.  The continued annual growth in the online retail market is evidence that this medium is withstanding the challenges of the economic downturn and the retailers that continue to expand and improve their online presence will no doubt reap the benefits during the festive trading period."