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Recession to have little impact on online sales this Christmas

25% of consumers now expect to spend £1k or more online, twice as many as in 2008

OMNICHANNEL

Recession to have little impact on online sales this Christmas

Consumer expectations and willingness to spend online during the Christmas peak season are higher than ever before according to the 2009 Consumer eTail Report from GSI Commerce,
which polled the views of a representative sample of 2,043 British adults with research specialist Maximiles.
 
A quarter of people are willing to spend more than £1000 on a product online this year, compared with just 12 per cent in 2008. There has also been a reduction in the number of consumers who claim they will cap their spending at £250 or less per product (32% in 2009, compared to 48% last year).”

Consumers say no to social shopping

The data also revealed a widespread apathy to the prospect of purchasing through social networks. The report identified and asked users of social networking sites whether they would be willing to purchase products directly through sites such as Facebook, MySpace and Bebo – only nine per cent claimed that they would be likely to do so, with 28 per cent saying that they would be positively unlikely to do so.
 
Steve Davis, EVP & President, International GSI Commerce commented: “Although some retailers, such as 1-800-Flowers in the US, are beginning to launch transactional stores on social networks, features such as these will fail to make a significant sales impact in the short term. Social networks are fantastic forums to listen and engage with your customers but, as the data reveals, at the moment, in the vast majority of cases, they are simply inappropriate for transactional interactions. While there is no doubt that incorporating features like these will result in a corporate PR benefit to a retailer, the question they need to be asking is not ‘what cool stuff can we add to our store’ but ‘where can we add value for our customers’.”
 
Traditional direct marketing and merchandising tactics continue to be most effective in engaging consumers to purchase with 63 per cent claiming email promotions would be most likely to provoke them to make an impulse purchase and 47 per cent citing limited time offers.
 
Usability expectations double since 2008

The research also revealed that 75 per cent of consumers claim a lengthy registration process would be the factor most likely to make them abandon an online purchase, more than twice as many as in 2008 (33%). Almost half (45 %) also cited being shown irrelevant information and 38 per cent cited a multiple page payment process, compared to 8 per cent in 2008.
 
Davis comments: “Consumers are far less tolerant of poor usability and layout. Retailers need to employ thorough usability and eye-tracking tests well before the peak season. Sometimes it’s as simple as taking three strangers, locking them in a room, and giving them 50 pounds to purchase some merchandise on your sites.  Watch the experience; ask them to talk you through it.  You’ll be shocked at how many opportunities you have to simplify and enhance your shopping experience.”

Multichannel platform has become most appealing offering
 
Consumers are demonstrating a notably increased demand for multichannel shopping options with the amount of people claiming their decision to purchase would be positively influenced by the option to buy online/pick-up in store rising from five per cent in 2008 to 29 per cent in 2009.
 
The report also reveals that, if faced with the choice between a product offered at the same price in two stores this Christmas, 94 per cent of consumers claim free delivery would be the single most important factor in their decision to make a purchase, a substantial increase from 68 per cent in the same period last year. The ability to choose a specific delivery time was the second most important factor with 45 per cent of consumers claiming that it would sway them to purchase, a rise from 16 per cent in 2008.
 
Fulfilment and returns management are also explicitly tied to the potential for repeat sales. When asked what would be most likely to deter them from making a repeat purchase from a brand, almost seven in ten (68%) cited late delivery, an increase from 28 per cent in 2008. Similarly, 76 per cent cited an expensive and lengthy returns or refund procedure, a rise from 33 per cent last year.
 
Davis comments: “Fulfilment will be absolutely key in determining whether a retailer has a successful peak period. It’s been known for some time that free delivery is a major influence on a consumer’s decision to purchase with you but now many retailers are thinking beyond simple delivery to multichannel options such as buy online, pick-up or return a product in store. Many retailers initially see obstacles in implementing these solutions. However, by investing in these areas, retailers should see an impressive return on investment in good time for the holiday sales peak.”

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