November 29 2006

62% expect to purchase more online this Christmas

As we head towards December another flurry of surveys predicting Christmas online spend hit the news desk at IR Towers. It would appear that women will be doing more of their Christmas shopping online - and intend to sell unwanted gifts on classifieds and auction sites once the celebrations are over.

Trusted and big brand presents will be bought, along with "traditional gifts of music, books, clothing and cosmetics," said marketing solutions company eCircle. Argos, Boots, Woolworths, Marks & Spencer and Tesco top the list of bricks and mortar stores for present buying. Amazon and Argos head up the ranking of where people will be buying from online. Littlewoods and HMV are also listed, with HMV appearing at number 8 in both the online and offline list of retailers which respondents plan to buy presents from. Play.com, Tesco and CD Wow are also mentioned.

Two-thirds of respondents said that they will be researching products online, a fact which is backed up by a survey by Nielsen//NetRatings. "Not only does the internet account for the majority of the Christmas gift spend amongst the online population but it is also being used by almost half as the first stage in the buying process on the high street" said Alex Burmaster, european internet analyst at Nielsen//NetRatings.

Various surveys of online spending predict that UK consumers will spend up to £500 each online. The time that these same consumers are researching products online with the intention of buying them in the high street gives retailers another opportunity to close a sale. "On the other hand," said Burmaster, "high street retailers need to ensure that they minimise the chances of losing their customers at this point by improving their own online offering."

Of course, there are always the affiliate networks to increase sales - toy store Hamleys has turned to TradeDoubler to help extend its reach outside the iconic London store location, and to drive online sales.

Two out of three bricks and mortar retailers in the UK are yet to make the move to selling online, according to Barclaycard Business, and are therefore missing out on much needed Christmas business. Of more than 1,000 retailers surveyed, 69% do not currently trade online. 23% cited the cost of setting up an ecommerce site as a barrier. 13% responded that they felt they did not have the technical know-how. Will we be reporting on lots of business wins early in 2007 as more bricks and mortar retailers are helped online in readiness for next Christmas?

Press release from Nielsen//NetRatings follows:

Women Driving a Golden Online Christmas

62% of Britons online expect to make more Christmas gift purchases via the Internet than last year Women leading the Online Christmas Gold-Rush * Women, overall, are 38% more likely than men to buy a Christmas gift online and 55% more likely than men to do "as much of their Christmas shopping as possible" over the Internet * In a reverse of last Christmas, women will spend more than men on Christmas gifts in TOTAL (£440 vs. £424) and Christmas gifts ONLINE (£240 vs. £233) * Women are one third more likely than men to raise money for Christmas spending by selling items on classifieds / auctions sites * The number of women intending to sell unwanted Christmas gifts on classifieds/auctions has grown by more than two-thirds from 15% last Christmas to 25% this time around. Women are now 39% more likely to do this than men

Alex Burmaster, European Internet Analyst at Nielsen//NetRatings says, "There is little doubt that the behaviour of all areas of the Internet population is encouraging for retailers this Christmas. However, perhaps for the first time, it is the behaviour of women online that will dominate the success of the online Christmas." People in the North West the most generous on presents * Online consumers in the North West are the most generous - spending an average of £446 per person on Christmas gifts. South East consumers are the least generous, averaging £414 per person * Consumers in the North West will actually spend the least on gifts purchased online (£211) whilst their counterparts in the South West will spend the most online (£242)

Christmas Retail Battle: Online vs. the High Street

* Convenience is the single best thing about shopping online for Christmas (cited by 34% of Britons online) followed by the absence of crowds (23%), waiting or queues (17%). Only one in eight (12%) cited cheaper prices as the best thing * Overall, Britons online will dedicate 55% of their total Christmas gift spend to online - spending an average of £237 online and £197 on the high street * 35-44 year olds will dedicate the greatest percentage of Christmas gift spend to online (57%), 16-24 year olds the least (52%) * In England, consumers in the South East / East Anglia will devote the greatest percentage online (56%), consumers in the North West the least (47%) * 44% of Internet users research most of their Christmas shopping online before buying gifts on the high street, with women twice as likely to do this as men * 25-34 year olds and consumers in the Midlands are the most likely to research online before buying on the high street; people over 55 and those in the South West are the least likely

Burmaster comments, "Not only does the Internet account for the majority of Christmas gift spend amongst the online population but it is also being used by almost half as the first stage in the buying process on the high street. The potential for online retailers, is therefore, even greater if they can convert people at the 'point of research' into buyers there and then. On the other hand, high street retailers need to ensure that they minimise the chances of losing their customers at this point by improving their own online offering."

The Big and Trusted Brands at Christmas

* 43% of Britons online always try to buy trusted or big brand names as Christmas presents

* Gifts from trusted or big brand names are most likely to be bought by 16-24 year olds and consumers in the North/ Yorkshire/ Humberside region and least likely by people aged 45-54 and those in Greater London

* Tesco (cited by 40% of Britons online) is the most popular supermarket for getting the Christmas groceries online - twice as popular as nearest rival Asda (19%) and almost three times as popular as Sainsburys (15%)

* Almost half of Britons online (45%) still have concerns about the handling of their credit card and personal info when shopping online. People over 55 are the most likely to have these concerns, 16-24 year olds the least likely. Women are a third more likely to have these concerns than men

* Consumers in the South West are most confident with the safety of shopping online, those in the Midlands the least confident

Burmaster concludes, "Despite the growing confidence in online retail and growing sales, e-retailers aren't out of the woods yet when it comes to the perceived security of online shopping. There is still much work to do in implementing and, particularly, communicating security measures to potential consumers. This is certainly an advantage that the big and trusted retail brands have over the smaller or newer niche online players."

Emma Herrod