Credit crunch impact will lessen online - Net.Matters - August 2008

We can't open a newspaper, switch on the TV, or click on an article without somone making a reference to the global credit crunch.  But do we really know what impact it will have on businesses operating in the e-retailing environment?  A survey conducted by E-consultancy in association with immediate future and Logan Tod & Co. has recently been published, attempting to gauge the impact in the UK.

The Online Shopping and Credit Crunch Survey Report has assimilated data from 1,346 UK adults (16 and above).  The survey was conducted online between 16 and 21 May 2008.  Approximately 65% of those sampled intimated that poor economic conditions (namely the credit crunch and falling house prices) would affect their spending patterns.  However, 56% of respondents said their online spending would either not be affected or would actually increase.  The survey surmised that consumers perceived that more bargains were to be had online, or at the very least, they were able to shop around using price comparison sites. 

Breaking down these statistics by gender, and only 30% of men were planning to reduce their online spending, compared to 42% of women.  When comparing the spending power across different age groups, the figures are not unsurprising.  From within the 16-24 age group, 54% said the current economic downturn would not affect online purchasing over the next 12 months, whilst the figure for the over 55s was 57%.  Argueably, these age groups have fewer financial commitments than the 24-34, 35-44 and 45-54 age groups, who confirmed they would reduce their online spending (40%, 39% and 41% respectively).


When asked what was the biggest influence on purchase decisions, price comparison websites came out on top:

E-commerce websites without consumer review features should take note - almost two-thirds of those questioned said they would be looking at price comparison websites and user reviews to ensure they were purchasing at the best possible price before going to checkout.  Of those surveyed, 64% said price was the single most important factor and 62% said they would now consult webshopper reviews.  Although it takes time to get the content for a review system in place, it does pay dividends since shoppers are referring more and more to other recommendations.

The report summarises, "the survey suggests that online retailers can adjust to a weakening economy by giving customers what they want in terms of price and quality, while retailers who currently don't offer user reviews or submit feeds to comparison engines may be missing out, as these are also influential factors when buying online."