U.K. consumers will spend £7.75B online during the five-week shopping month of December, with nearly half spent in first two weeks; 35% plan to do more online shopping this year than last: IMRG
November 14, 2011
– Following analysis of the IMRG Capgemini e-Retail Sales Index, we estimate that £7.75bn will be spent online during the 5-week shopping month of December (starting w/c 28th November). Almost half of this (£3.72bn) will be spent in the first two weeks alone.
While in earlier years the trend was for a few days that far exceeded the rest of the month in terms of sales, 2009 and 2010 in particular revealed a trend toward peak activity weeks. These peaks will follow a steady increase in activity throughout November.
In 2010, the two peak activity weeks (w/c 29th Nov and 6th Dec) had the exact same share of the month’s sales - 24% each.
We also anticipate that Christmas 2011 will be the year in which mobile really breaks through. Research* carried out by IMRG and eDigitalResearch found that 35% of people plan to do more shopping over the platform this year. There are other indicators: 14% of Google search queries come from a mobile device and eBay’s sales over the platform have so far exceeded expectation that they have revised their estimate of $4bn in worldwide mobile sales for 2011 up to nearly $5bn.
What are the trends influencing our forecast for Christmas 2011?
There are a number of interrelated factors that may be influencing this emerging trend. The phenomena of Cyber and Mega Monday could in prior years be attributed to them falling just after payday for many people who, having browsed products in a shop at the weekend, made the purchase using the fast broadband at work. Fast broadband connections are now widespread in homes.
The economic situation may have led to people spreading the costs of Christmas over a few months, and the snow clearly had an impact in 2009 and 2010, with disruptive weather being forecast again for this year. But the real story actually concerns patterns in consumer behaviour and the nature of e-commerce.
UK consumers have proved themselves to be very savvy when it comes to interacting with a brand and making best use of the technology available to them. e-Commerce has provided consumers with a range of options that allow them to react to issues and opportunities, moving between the available channels in order to secure the best deal.
This may be ensuring they get the best price on offer at the online or physical stores, or reacting to incentives through mobile marketing or social networks. The ability to browse and shop is always available via this technology, and consumers have become adept at switching between the channels as opportunities emerge.
The big enabler of this has been mobile, which provides the opportunity to research and compare products in-store and on the move. This channel has been key to the evolution of the ‘agile consumer’, who is able to react to developments such as snow disruption and structure their shopping journey accordingly using all the tools at their disposal. 24 hour shopping availability has stimulated a rise in the sophistication of the shopping process for UK consumers.
David J Smith, Chief Marketing & Communications Officer at IMRG, commented: “The shopping behaviour displayed by the agile consumer reinforces the importance to retailers of offering a multichannel solution. Consumers want choice and continually demonstrate their willingness to switch channels to suit their specific circumstances and secure the best deal for themselves. Anyone focusing too heavily on a single channel is certain to miss out on opportunities for engagement as and when they arise.
“With this in mind, this could well be the year that mobile really has an impact on sales activity. Research we carried out earlier this year with eDigitalResearch found that 30% of tablet owners and 25% of smartphone owners have used their device to shop online. Consumers are clearly not fazed by interacting with retailers through these devices and the important role they play is only going to increase.”
Chris Webster, VP Head of Retail / Consumer Products and Retail at Capgemini, commented: “£7.75bn is a significant figure and one that is in line with the growth we have seen in e-Retail throughout 2011. We are still spending, but we’re being selective and this trend will be very apparent this Christmas. Technology is evolving and so is the consumer. Gone are the days when we were limited to shopping just on the high-street and were at the mercy of the weather. Shoppers have become very savvy, out of both need and convenience - we’ll hunt down the best bargains online to get the most out of our Christmas budget, but also because we can, easily and conveniently. Retailers understand consumer behaviour and have adapted accordingly, embracing the opportunity devices such as smart phones and tablets offer them in connecting with potential customers.”
Ulric Jerome, MD, PIXmania.com, comments: “We see the numbers of customers shopping across PIXmania.com start to increase at least a couple of months out from Christmas - so from early November when the first Christmas decorations start to appear - but it’s really from the start of December when the shopping seriously begins. We know that our customers are watching their finances and are under real pressure to budget from month to month so the first day of the month is like a green light - customers know what they’ve got to spend and online they go. We see demand usually double overnight - from the start of December last year it shot up by 117% - and then continue to build through the month right up to Christmas.”
* eCustomerServiceIndex (eCSI) survey of 6,000 UK consumers, August 2011
IMRG (Interactive Media in Retail Group) is the UK’s industry association for e-retail. Formed in 1990, IMRG is setting and maintaining pragmatic and robust e-retail standards to enable fast-track industry growth, and facilitates its community of members with practical help, information, tools, guidance and networking. Consumers can be confident when dealing with IMRG Members because all interact in an environment where they are encouraged to operate using methods that are Honest, Decent, Legal, Truthful and Fair, and have undertaken to not bring the industry into disrepute. The strength of IMRG is the collective and cooperative power of its members. For more information please visit http://www.imrg.org or email firstname.lastname@example.org.
With more than 115,000 people in 40 countries, Capgemini is one of the world's foremost providers of consulting, technology and outsourcing services. The Group reported 2010 global revenues of EUR 8.7 billion. Together with its clients, Capgemini creates and delivers business and technology solutions that fit their needs and drive the results they want. A deeply multicultural organization, Capgemini has developed its own way of working, the Collaborative Business ExperienceTM, and draws on Rightshore ®, its worldwide delivery model.