Happy holidays for online retailers

December 7, 2004 —

With Christmas time coming, it's time to check in on the status of e-commerce. Are people buying online in greater numbers? If you're selling online, what's the trick to getting people into your site and cashing in on some of this seasonal retail bounty?

A quick check of my e-mail reveals that in the last week I have won six international lotteries, and have eighteen relatives of deposed heads of state offering me several millions of dollars each to help them funnel secret funds into the United States, so I should have plenty of money for Christmas shopping this year. Last year I managed to avoid the Christmas insanity and mad rush to go into debt because I was living in Thailand, a Buddhist country, and my Christmas there was pleasantly low-key. But here I am, back in the US, and have been listening to Christmas carols have been staring plastic Santas in the face ever since Halloween. About a third of the respondents in a British survey said they started getting ready for Christmas in October or earlier, with ten percent starting in or before August. I would assume a similar pattern for the US.

So how is online commerce faring in terms of getting their piece of the Christmas pie this year? The online commerce revolution is about convenience, and one thing that will always rub people the wrong way about online shopping is the fact that you have to pay for shipping and wait for your goods to be delivered. Some of the biggest winners in the online commerce arena are those who offer things that don't have to be shipped, like music downloads and software. A great example of convenience in online commerce is the company Stamps.com, which just posted its first profitable quarter, deriving its profit from saving small businesses a trip to the post office.

Another byproduct of the holiday season is stress. A CNN report told that 40% of men, and 52% of women between 35 and 54 have increased stress levels during the holidays, and online pharmacies such as Web-Doctor-Online-Pharmacy.com are there to help with advice and anti-depressants.

A Harris Interactive survey commissioned by comparison shopping site NexTag.com said that 66% of adults in the US with Web access will buy at least one gift online this year, and 22% say they will do more online shopping this year than they did last year, so it seems the inconvenience of having to wait for your goods to arrive at your door is outweighed by the convenience of not having to go to the shopping mall quite as much. Another survey by TechnoMetrica Market Intelligence says that consumers will spend at least as much as they did last year on Christmas, with one in six spending more than last year. Another market study from NOP World showed what online shoppers are buying. About 45% of online shoppers will buy clothes, up from 28% last year; and personal electronics is also a big winner, with 37% of online shoppers planning to buy these items. The biggest winner in online commerce will be books, movies, and videos, with 67% of online shoppers planning to buy these items.

So how do retailers get their piece of the action? A DoubleClick market study showed a big increase in the productivity of email marketing. The number of orders per e-mail has grown, although revenue per e-mail has declined somewhat. Of course, avoiding doing things that would result in the retailer being thought a spammer will help, as more people use the delete button before even reading a message. Maintaining a clean list and adhering to your individual customers' preferences will result in higher response rates, said the DoubleClick report.

ITworld.com, Ebusiness Insights