Webloyalty Comment
Will it be a happy online Christmas?
Stepping out of Webloyalty's Oxford Circus office always reminds me that however successful online retail has become, the high street remains as vibrant as ever. Soon, shoppers will prove this with their feet, as they descend on the West End for a festive bun-fight, floodlit in twinkling blue, and fought with credit cards and carrier bags. As inevitable as mince pies and mistletoe, Christmas means that my usually pleasant stroll to Oxford Circus tube will become an expedition requiring a hard hat and steely resolve.
When that happens, I, like many others, will begin to wonder whether the retail 'experience' - so often billed as the high street's saving grace - is a little over-sold. My home PC, next to a window with a nice view over my garden, will spring to mind, making me think of the alternative 'experiences' I could enjoy if I saved myself time - and money - by doing more of my Christmas shopping online.
Although concern over higher interest rates and the global credit squeeze may take some of the shine off the so-called 'golden quarter' this Christmas, online spending will still be huge. Logan Tod & Co predicts sales will hit £10 billion, compared to £7.5 billion in the 10 weeks running up to last Christmas. This is double the amount spent online at Christmas just two years ago.
Over the next five years, Verdict Consulting predicts that the overall e-retail market will double in size again. Comparatively, overall retail will grow by a less impressive 12 percent. In terms of share, Verdict says that e-retail will grow 4.9 percent of all retail spend today, to 9 percent in 2011. Some forecasters are even predicting that the internet will account for 40% of all UK retail sales by 2020.
These are trends that online retails cannot afford to ignore - least of all at Christmas. This is the time of year that, more importantly than ever, e-retailers need to have strategies in place that maximise the sales opportunity.
At Webloyalty, our business model is all about helping e-retailers drive the most value from their online stores. Just as offline retailers are painstaking about utilising space in their stores to generate incremental revenue, online retailers can also be more savvy about using every inch of their site to turn internet 'footfall' into money.
And, in the run-up to Christmas, when trading volumes are booming, it makes more sense than ever to do this. If an online retailer is getting its highest traffic of the year, it is a wasted opportunity not to explore ways of generating additional revenue that go beyond sales alone.
The same argument goes for consumers. If Christmas is when they are making the most use of the internet for their shopping, it is the perfect time for them to take advantage of schemes that offer them discounts, savings, insurance and delivery benefits.
Our programmes, such as Shopper Discounts and Rewards in the UK, and Reservation Rewards in the US, are proven in their ability not only to allow shoppers to take advantage of a wide range of excellent saving and benefits, but also to generate additional revenue for the retailers we partner. At Christmas, these benefits are more evident than ever - and the potential rewards, for retailers and consumers, at their greatest.
Verdict Consulting recently explored this emerging model of retail site monetisation, and concluded that that in 2007 the potential value of the monetisation of retail websites from schemes such as Webloyalty's, could be worth up to £129.97 million, growing to £817.5m by 2011.
I argue that this is the new frontier of online business. Everyone who wants one has now developed an e-commerce strategy - now is the time to really make it pay. The critical mass of shoppers is there, and Webloyalty has provided e-retailers with a business model to match.
So, when the yuletide frenzy begins in earnest, make sure you're prepared. Grasp the opportunity. What would you prefer to be reflecting on in January - a Christmas cracker, or a turkey?
