European consumers will spend €9 billion online this year on Christmas shopping, almost as much as US consumers will, according to a new brief by Forrester Research B.V. (Nasdaq: FORR).
“Europe is hot on the heels of the US,” said Forrester Analyst Hellen K. Omwando. “This Christmas season, Europe¿s 166 million regular online shoppers will spend €9 billion online — 24 percent of total online retail for 2003 — compared with $12 billion in the US. Forty percent of Europeans shop online, but two countries make up almost two-thirds of all online holiday sales in Europe. With higher Internet shopper penetration than even the US and with consumers who spend more per online basket than other Europeans, the UK will ring in €3.2 billion (£2.2 billion) in holiday sales, 36 percent of Europe’s total online Christmas sales for 2003. Germany follows with 27 percent or €2.4 billion.”
Forrester reports that the traditional hot online categories will yield 43 percent of sales this holiday season. Travel will bring in the most money as consumers take advantage of cheap fares — as low as 1 euro for European flights with Ryanair — to visit relatives or escape to warmer climates. Only 7 percent of online Europeans shop for replenishment products — but the bottles of claret from Virginwines.com and turkeys from Icelandstore.co.uk add up. Books remain a favorite online purchase for even the most tenured consumers; they will be among the must-gives this season, with consumers turning to the Web for special discount copies of bestsellers.
The UK’s IMRG index of online retail sales shows that consumers start their holiday shopping in November to avoid the Christmas crunch. These consumers want to make sure that they don’t fall victim to the stock shortfalls common at this time and delays in getting their orders; in doing so, they also help the retailers that serve their needs avoid missing out on sales.
“Winning retailers will turn to customer advocacy — doing what’s best for consumers and not just for the bottom line — and focus on the biggest headache that consumers face during the Christmas period,” Omwando added. “Fulfillment is the most important part of the chain. Retailers must prepare for “unexpected” delivery bottlenecks — like strikes; offer free shipping creatively; and expand delivery options.
“The Christmas holiday season is a favorite time for unions to go on strike in Europe — as the mail strikes in France have shown in previous years and as the UK’s Royal Mail experienced this month. Smaller retailers, in particular, suffer. In order to resolve the delivery conundrum resulting from strike-hit mail services and assuage consumer fears about non- or late delivery if they order online, retailers should cut deals now with private delivery networks like DHL that can quickly respond to such situations. Limited delivery times remain a problem for online retail. But during this season, large retailers — especially multichannel retailers — should take advantage of their stores by using them as service points for those consumers who order products online but prefer in-store pick-ups because of suboptimal home delivery times or their reluctance to share credit card details online.”