Santa Claus is coming to town.com
The predicted spend represents growth on the £5billion recorded last Christmas and the £3.3billion of 2004. Mark Kelly, client services director at McCann-i, with a client-list that includes fashion retailer Next, reckons the now-ubiquity of broadband is driving the online spending boom.
“It is also a matter of trust,” Kelly reasons. “Consumers trust the big brands to handle their details securely and to get products to them on time. That’s why brand activity online pre-Christmas is so important.”
Fuse Digital account director, Rik Pipe, has recently overseen the Leicester agency’s putting together of a new e-commerce site for slipper company Ruby + Ed, ready for the firm’s crucial Christmas trading period.
“What we’re seeing through the Ruby + Ed stats is a lot of male shoppers buying online,” Pipe says. “Why? Because they can get their present bought, wrapped and on its way to being delivered in the time it would take to find a parking space in Birmingham.”
Stuart Avery, joint managing director of Bristol-based digital agency E3, says that while the figures reflect a growing confidence in e-tail amongst the masses, speaking to the consumer individually gives the biggest indication as to why they’re finding their presents online.
“Anecdotally, they’ll tell you how much easier it is to shop online and avoid the madness of the high street. A lot of us just don’t want the hassle of queuing at stores only to find that our product isn’t in-stock,” he says.
As well as real-time stock checkers - as standard on most e-tail websites - McCann’s Kelly cites online price checkers as a convenient solution to trudging the high street for the best deals.
That said, while Kelly acknowledges that consumers like to bargain hunt with aggregators, it’s still the big retail sites that they trust enough to buy from, he says.
“In terms of building trust, ultimately,” says Pipe, “it’s making sure that when people buy from you, their product arrives on time, it’s what they’re expecting and that nothing bad has happened to their credit card. Do that, and you’ll build the relationship.”
Avery admits that while some name retailers are starting to dominate online, it doesn’t necessarily mean that it’s businesses which have originated from the high street that are cleaning up. “Look at Amazon,” he says. “Many people look at it as their norm as much as any high street retailer. It isn’t just an alternative, it’s their first choice.” Amazon.co.uk’s predictions of this Christmas gazumping the 400,000 units it sold on its busiest day last year, adds weight to the point.
Crucial, according to Avery, is making sure retail and brand websites are geared ready to handle the increase in volume well before people even get to the e-commerce stage.
“If clients are looking to drive for customers at Christmas, they’ll often task out usability reviews to ensure their site is ready for the volume. When we do these, we’re basically making sure that the customer arrives at the front door when they load the page. The site has to be ready, front-end, before even thinking of getting them to buy anything.”
Maximising profits online isn’t just a rich man’s game, according to Karl Barker, MD of Cube 3 Digital. Instead, he reasons, it can provide a wider outlet for smaller shops out in the sticks.
“A lot of the retail clients we deal with are smaller boutiques in places as far flung as Rock in Cornwall and Lytham St Annes,” Barker says. “Getting online gives these small but successful shops a nationwide customer base for their niche products, which can be found via SEO strategies built into the site structure.”
These small boutiques don’t need to have the big bucks to spend on their site, according to Barker, who says that a good looking and comprehensive e-commerce site can be set up and developed for less than £5000.
While e-tailers big and small look set to cash in during the festive period, are we moving towards online becoming the dominant form of retailing all year round?
Barker is enthusiastic about e-tail’s potential; “When broadband coverage hits the expected 60 per cent plus for next year then the online boom will really hit,” he says.
Fuse’s Pipe says that online will thrive in certain sectors, noting how it’s already changing the face of music retailing with mp3 downloads. “Imagine you’re a parent shopping with your children for a school uniform,” he says. “It’s a nightmare for you and the kids hate it. Do it online, and the kids don’t mind sitting in front of a computer for ten minutes, because it’s their domain, and then you can always send things back if they don’t fit.”
Traditional retail has to work hard to keep up, agrees Kelly, who believes a more imaginative approach is required to draw people to the high street. He points to the German Christmas markets that are an annual draw in Manchester city centre as an example of getting consumers into the retail districts.
But is the temptation of a bratwurst really enough to affirm consumers’ loyalty with the high street?
Pipe says that a proportion of consumers like to find the product they want online but still go out to the stores to examine it for themselves and then make their purchase.
“The internet can’t recreate that touchy feely process that some people still want, but as long as we’re presenting the products online in a way that clearly shows the consumer everything it offers, more people will buy online, the kind of people who feel they have better things to do than waste hours down the high street.”
Sue Little, chief executive at McCann Erickson Communications House in Manchester, believes online hasn’t peaked yet, but does think the boom will eventually plateau and the high street will see some consumer loyalty. “Online shopping has seen breathtaking growth and it will continue to grow for several years to come and then it will find a natural level,” she says.
Little points to the buzz the high street can still evoke with the January sales as an example of the allure of tangible shopping. “Being first to the best bargain is real shopping experience for many people.”
Whatever the future holds for online, Little is convinced it won‘t have it all its own way. “It’s still far from over for the high street,” she says.
The debate could go on, but for now, The Drum has to dash to do its Christmas shopping.