January 17 2007

[Editorial] Christmas 2006 up 54%

Online sales exceeded expectations this Christmas as shoppers worried bricks and mortar-only retailers by flocking to their computers instead of the high street in early December. Total sales taken by internet retailers in the ten-week run-up to Christmas were up 54% on the same period in 2005.

Figures from the Interactive Media in Retail Group (IMRG), show that Christmas 2006 exceeded predictions with sales increasing to £7.66 billion (a quarter of the £30.2 billion-worth of sales made online in the whole of 2006).

The highest sales levels were recorded between 1 and 2pm as consumers shop online from work, but another peak is being seen between 7 and 9pm. "The evening internet shopping peak is a recent phenomenon that has become possible with consumers' acquisition of broadband at home," said Chris Russell, Director of market research company eDigitalResearch. Monitoring of half a billion page views to leading e-retailers showed sales in the evening peak to be 80% as high as those at lunchtime.

Delivery and stock-outs were an issue for internet shoppers trying to buy their Christmas presents online. Both of these are areas over which retailers have control and better planning could have led to more online sales and better customer service. At least one website was taking orders for products which were out of stock and then having to refund customers and explain the situation.

Traffic levels to e-retail sites dropped off sharply from Tuesday 19 December as retailers came up against Post Office delivery deadlines for guaranteeing delivery of presents before Christmas. Retailers with their own delivery service were in a better position in the final week but, as Tesco found out, delivery slots soon filled up - even with an extra 300 delivery vans.

Retailers who had planned and correctly anticipated demand - and had worked closely with the courier companies - were able to continue delivering until 23 December.

This left shoppers with the choice of buying magazine subscriptions and emailable vouchers online - or a last minute rush to the high street on the Saturday afternoon or Sunday. The day on which Christmas Day falls is something which internet retailers cannot control.

Key facts for internet retailing for Christmas 2006: