Retailers shift their ad spending from TV, radio and print ads to digital ads.
But a report says that consumers are spreading out their gift purchases.
U.K. consumers will spend 6.4 billion pounds (US$10.06 billion) online in December, up 16.4% from 5.5 billion pounds (US$ 8.65 billion) for the same month last year, according to a report released today by the Interactive Media in Retail Group, a U.K. e-retail trade group, and Capgemini, a technology and consulting firm.
Results from last month show online U.K. shoppers spent 4.8 billion pounds (US$7.55 billion) in September, up 24% from last year. The two firms say that bodes well for online holiday sales.
But the report says the country’s strong online shopping growth contrasts with the falling sales of British bricks-and-mortar retailers, referred to as “high street” retailers in Britain.
“The disparity between these figures reveals a very interesting trend amongst British consumers,” says Chris Webster, head of retail consulting and technology at Capgemini. “Purse strings are getting tighter as concerns about the government’s austerity drive begin to have an impact on consumer spending confidence. The rise in online spending is at the expense of high street sales and we may even see an early peak with shoppers looking to spread the cost of Christmas.”
September online sales support that theory. Gift sales in September increased 32% year over year and 8% in August, the report says.
“We are seeing people planning their Christmas shopping further in advance than previous years,” says Alison Wade, head of marketing at e-retailer Buyagift.com. “At the beginning of September we launched our strongest ever range of Christmas offers, a month earlier than last year.”
The only online shopping category that reported a drop in September sales was home and garden, decreasing 1% from last year, the report says. Every other sector tracked reported growth of at least 10%. Clothing, footwear and accessories posted sales growth of 28%.
Multichannel retailers such as supermarket chains Sainsbury’s and Tesco and department stores such as John Lewis posted some of the biggest online sales growth over last year, the report says. Year-over-year online sales growth for September for multichannel retailers was 31%, while web-only retailers’ sales grew 15%.
IMRG and Capgemini predict online sales for the fourth quarter of 2010 will total 17.4 billion pounds (US$27.37 billion), up 16% from 15 billion pounds (US$23.60 billion) for the same period last year. The report estimates that total online sales for 2010 will reach 57.8 billion pounds (US$90.90 billion), also up 16% from 49.8 billion pounds (US$78.32 billion) in 2009.
Economic worries including government spending cuts, sales tax increases, concerns about job security and the decrease in the average household disposable income are driving consumers online to comparison shop and look for the best deals, adds Tina Spooner, director of information at IMRG.