Online Christmas shopping activity explained

November 3, 2008
by Mark Johnson

In the past few years, we have seen a large increase in people buying Christmas presents online, with IMRG stats showing a 49.5% increase for December 2007 on the same period in 2006, and an increase in those that now do a lot of their research there too, even if they then decide to purchase on the high street.

That trend looks set to continue with Google telling us that:

• 66% of shoppers say they are more likely to shop online for Christmas presents this year

• 77% plan to carry out half or more of their Christmas shopping online

• 86% will research Christmas shopping on the internet before buying in-store

It is the last statistic that retailers should be most concerned about. It is widely know and accepted that we will spend record levels online this Christmas. But, with the UK in recession, customers are also expected to shop around a lot more for the best deals, checking for availability and comparing prices. With a variety of comparison sites out there to help them, and users more and more capable of using the search engines to find the information they need, it is as easy as ever to find the gifts they want at the cheapest prices.

It is therefore more important than ever that online retailers and high street retailers get their Christmas strategy right and bear in mind a couple of things.

Firstly, 30% of users form a negative perception of a company with a badly-designed website. If the site isn’t aesthetically pleasing or has long load times and poor navigation, it is likely that they will not come back to the site or visit one of your stores when they decide to purchase.

Secondly, if they have not found the item on the site, 50% of people assume it is not available in store either. This statistic only reinforces the importance of having a working, up-to-date website. By not appearing in the research phase of the buying cycle, you could potentially be missing out on a lot of sales when people do decide to purchase.

Retailers are all about return on investment (ROI) - you have to invest to get a return. At the start of this piece I mentioned that, now we had entered the month of November, we were about to embark on the next stage in the run up to Christmas. What I mean by this is that for the past month or so we have very much been in the “research phase”. However, I predict that by mid-November we will enter the critical “buying phase”.

Costs per click (CPCs) will begin to rise as competitors jostle for positions on Page 1 and this continues pretty much up until the last Christmas delivery day in December, which for most will be the 22nd or 23rd this year.

However, many of these retailers may have missed out on a large slice of the Christmas gifts pie, by not appearing high enough in the research phase. There is a gamble to be made by appearing in high positions in the month of October and first few weeks of November. Sacrificing ROI slightly during this period could actually mean reaping bigger rewards in December when consumers comes back to buy.

Online retailers would therefore expect to see many of these users come back through cheap brand terms too, and there is also potential for them to see other presents they’d like to buy when on the site. Also, on top of this, high street retailers may see more people visit their offline stores.

I’m not sure that all the high street retailers fully understand how important their online activity is in the run up to December and Christmas. Those who do will have a user friendly website, up-to-date stock levels and may well have online promotions and in store vouchers. They understand that it is far easier to get people to buy gifts once they are in their stores. Merely looking at online activity’s ROI will not show the bigger picture nor reap the biggest rewards. With 86% of customers researching online this year, it is essential that sufficient exposure to them is maintained whilst we remain in this “research phase”. Still more, the statistics above indicate that a holistic strategy is key in order to maximise conversion volume; whether in store or online.

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