Commentary

Behind the Numbers: Channel Marketing

Despite a decline in consumer confidence in recent months, ComScore predicts a vibrant online shopping season. And Lisa Strand, director and chief analyst, Nielsen//NetRatings, says in a recent release that reports best practices for the 2002 holiday season, "The 2002 online holiday season will likely resemble the 2001 season, with the economy setting the tone and pace for e-commerce. With more than 85% of all adults online having shopped online within the last six months, e-tailers can position themselves early with strategic sales and promotions and capitalize on the growing number of online shoppers."

Pew tells us that 15% of these shoppers have household income under $30,000; 25% earn from $30,000 to $50,000; 29% from $50,000 to $75,000, and 39% over $75,000. DoubleClick reports that last season 92% shopped at retail stores for gifts, 61% shopped on the Internet, and 27% shopped in catalogs. Consumers talked the talk, but in the final analysis, the combined data from three sources tells us that 79% of the 2001 holiday gift budget was spent in retail stores, 15% online, and 6% in catalogs. So why all the hype about Christmas online?

The overall tenor of the Nielsen//NetRatings Christmas in August Holiday report suggests that with well over 85% of all adults online having shopped online within the past six months, e-tailers can count on the vast majority of shoppers’ using the Internet to make their buying decisions this holiday season.

However, while online spending continues to grow, online performance is a reflection of the overall retail environment. Lower consumer confidence, combined with the strong growth in the number of lower-income households shopping online, means that consumers are seeking value. Though the implication that the selling point of online retailing is the appeal of 24-hour shopping in the privacy of one’s home or office, the bottom line for consumers — in these economic times — is price.

When shoppers were asked about the most important reason for making an online purchase at one website or another, item price was the most frequently cited reason. By contrast, shipping costs was the seventh most common reason for making an online purchase, behind brand name, trust, and having already registered at the site.

Finally, ComScore reports that although the Friday following Thanksgiving (Black Friday) is likely to be accompanied by an uptick in online sales, the online season will start in earnest on Monday, December 2, and is likely to end on Friday, December 20. This will result in a compressed online season with higher daily average sales and consumers increasingly reliant on multi-channel "order online/pick up in store" services. And the timing of promotions can be as critical as the content. Black Friday not only is the biggest shopping day of the year in the offline world, but also draws huge numbers of holiday shoppers to e-tail sites.

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