08 Jan Online Christmas spends – A worry for the High-Street?
By Kate Enright
The figures for online sales this Christmas were unprecedentedly high globally. Retailers saw a huge increase in purchases from their ecommerce sites over last month. Close to home, UK Internet users made 84 million visits to retail websites on Christmas Eve, and 107 million visits on Christmas Day – up 86% and 71% respectively compared to the same days in December 2011. Pretty impressive! Amazon also announced recently that 2012 was its biggest holiday ever with over 26.5 million items ordered worldwide on its peak day. So clearly 2012 saw a turning point in people’s attitude to online shopping. It is now for the masses. People have been well and truly converted.
House of Fraser and John Lewis were among the front runners and saw a steep incline in their online sales this year. No surprise really when you consider the time, effort and money they have pumped into their offline to online sales channels over the past number of years. It seems it is really paying off for them having stayed ahead of the curve. “Online really had a stonking Christmas, particularly when you have a look at the likes of John Lewis, that bodes well for others.” Kate Calvert of Seymour Pierce research stated, “House of Fraser is coming from behind relative to others, so I would expect a strong number.”
Figures from the Organisation for Economic Co-operation and Development (OECD) show that 60% of adults in the UK use the internet to buy products online now. This is twice the average of the OECD’s 34 member states, which include the US, Germany, Australia and France. It seems the UK is well and truly leading the pack. Britons spent £68.2 billion on the internet last year, an increase of almost £10 billion on 2010, according to IMRG, a body which represents the UK’s online retailers.
So what does all this mean for In-Store shopping? Are we to believe that the high-street will soon be no-more? Well, not necessarily. And the saving grace will be customer experience. Sure, online beats offline for price and convenience (depending on how long you can wait for your product), but offline is still on top for customer service, recoup-time and relationships with the retailer, not to mention the social and tangibility aspects of the experience. The following survey, conducted by Dimensional Research, identified several shopping-related activities asking whether people thought experiences were better in-store or online.
Here are the results:
The results show that people more often chose the in-store option for measures such as a great customer service, their questions answered, and relationships with the retailer – all of which were vastly in favour of offline. Can offline improve enough to fill these gaps or could they ever hope to in some areas?
Ease of making a return is clearly the most frustrating factors for online shoppers. Harris Interactive completed a survey last year which found that 70% of online shoppers surveyed feel that returning online purchases is a complicated process, 81% said they are not likely to make additional purchases from websites that charge shipping on returns.
It is from these types of victories that high-street retailers can hold their ground. A mixture of emphasising these benefits through good marketing while incorporating the best of online into their offline business will serve to save them from a murky future. Stores are now beginning to incorporate new technology in order to enhance the shopping experience and compete with online counterparts: Near Field Communication (NFC) for payments and recognition, linkage of Mobile platforms with in-store kiosks, and much more. 2013 is set to see a huge increase in digital in-store experiences. It is so important for retailers therefore to choose wisely and to ensure good integration with current channels. The whole idea is to give customers a better experience, give them the best of both worlds, and make their lives easier, worth keeping in mind when investing.
Throughout the first half of 2013 we will be writing a series of posts on consumer experience in the offline world and the best ways of incorporating the online features people love into retail businesses.