Despite consumer pessimism, European online retail spending will grow this holiday season to 160% of 2000, and will total €4.1 billion according to a new brief from Forrester Research B.V. (Nasdaq: FORR). The month of December alone will see almost 25% of all European online sales for the year. UK consumers will lead, spending €1.4 billion, accounting for almost 35% of all online spending in Europe, and marking year-on-year growth of 116%.
“Despite the general reluctance to fly, many European consumers will buy a leisure trip online this December, and travel will total €727 million. Electronics is the next strongest category, and European shoppers will spend €489 million on new PCs and other hardware, and %365 million on consumer electronics like new DVD players,” said Jaap Favier, research director at Forrester.
“The number of online Europeans has grown substantially since last Christmas -¿ between January and October, 24% more Germans visited the web, 31% more Brits, and 35% more French. But while few of this year’s Net newbies will buy online this Christmas -¿ only 12% of online users purchase online in their first six months -¿ as experience rises, inhibitions to shop drop, and 25% of those with one to two years’ experience are online shoppers today. For instance, many of the 34% of UK consumers that had their PC hooked up to the Net in August 2000 will make their first online purchase this season.”
But Forrester warns Europe’s retailers that this is a decisive time for their online success. With almost 25% of this year’s total online consumer shopping yet to be done in December, Europe’s online retailers face a hectic and critical month, in which they need to get fulfillment right to win return customers. First-time online buyers have high expectations, and on-time delivery is crucial, but most online retailers have only tested their processes with merely half of their December sales volume. To win, sites must hire and train additional call center staff in the coming weeks to keep up with demand.
“Also, to make consumers return in the New Year requires more than faultless fulfillment. Net retailers need to already prepare for follow-up email campaigns in January, offering value-added customer service and relevant offers such as insurance to leisure trip buyers and the latest DVD releases to the purchasers of new players,” Favier added. “With such well-targeted campaigns, they will top the average email conversion rate of 15% and maintain high turnover till next Christmas.”