Well, the much-anticipated holiday ’98 season is here. The season that has made online merchants eager to realize the growth in online buying over last year’s Yuletide season.
In addition to looking for sheer dollars, online sellers are also seeking to be tops in the minds of their online shoppers.
So what’s the verdict? Is this season all it’s been hyped up to be?
First, some data.
Globally, online retailing will reach an estimated $2.35 billion for this year’s holiday season, according to Dataquest, a unit of Gartner Group. The Yankee Group estimates the US holiday season will total $2.55 billion in 1998 — up from $800 million in 1997. Yankee also estimates that 35 percent of online households will shop online this holiday season.
What’s driving that growth? Well, one of the primary reasons is convenience — online buyers are looking to save both time and money, according to Dataquest. Security is no longer a primary concern for online buyers, which was a major issue thwarting internet retailing in the past. Dataquest also believes the reduction in buyer apprehension is due to credit card companies mounting heavy-duty advertising campaigns, coupled with the emergence of safe shopping guarantees by major online retailers.
The Yankee Group really goes out on a limb with its estimate that this year’s holiday sales will surpass all of last year’s online retail sales. According to its study, the six primary factors that can be attributed to the growth in online holiday sales include:
- Overall increase in the number of shoppers online.
- Visa USA’s expressed commitment to internet commerce.
- Influx of well-known and trusted brand-name merchants to the internet.
- Improvement of the usability and convenience of commerce sites.
- Increased promotion (online and offline) of online brand leaders.
- Unprecedented holiday site promotion by portal sites and major internet retailers.
After the dust clears from the online buying frenzy this holiday season, we could see a significant shift in online buying levels and habits.
So what’s been the experience of individual retailers? Floral retailer 1-800-Flowers, which is something of an online commerce pioneer, recently surveyed its own online customers and uncovered a few interesting things about online buyer behavior that apply to many commerce companies operating online. (The 1-800-Flowers survey covers 500 of its online buyers, 269 men and 231 women.)
A few of the survey’s findings:
- More than a third (36 percent) of its online customers purchased while at their offices. A previous survey showed that the most popular time to place orders was between noon and 2:00 p.m. — sort of the electronic equivalent of running errands during lunch.
- Eighty-six percent of the survey respondents say they will make more online holiday purchases in 1998 over the previous year, and 24 percent have already made more than 10 online purchases in 1998.
- Almost two-thirds (62 percent) of those surveyed feel that the security issue is not a major worry for them.
Donna Iucolano, vice president of interactive services at 1-800-Flowers, explains some of the survey findings thusly: “In addition to having a secure order system, security is influenced by the retailer. Your trusted brand reputation online, and offline, heavily influences your buyer’s perception of the security of their online purchases.”
Iucolano believes that online buyers value the following qualities about a retailer:
- Sensitivity to the buyer’s computing capabilities. Knowing what computers your buyers use, including their browser types/versions and access speeds, is important information when developing a web site.
- The ability to shop conveniently and quickly. Iucolano said, “Getting the buyer in and out of the store quickly with the use of gift ideas, comparison shopping, personalization, account information and other site features are key attributes according online buyers.”
- Mimicking the offline buying experience. The 1-800-Flowers site, for example, is built according to how people buy flowers from a local florist, including shopping by special occasion, by price range, by relationship between the giver and receiver, and by other recommendations based on the florist’s expert knowledge.
The 1-800 Flowers survey certainly isn’t the only measure of online commerce today. Another useful survey recently is the Shop.org/BCG survey, “State of Online Retailing.”
There is one common overriding theme in all of these commerce surveys: there are, in fact, more people buying online, and consumers are becoming more comfortable with the internet as a way to purchase goods and services.
For many retailers, this is, indeed, the most wonderful time of the year!