• by December 9, 2008

The current economic downturn has staggered consumers and businesses with a powerful one-two punch, leaving them wobbly and uncertain of the future. As the critical holiday shopping season approaches, marketers are urgently trying to understand the impact a perilous economy will have on online and offline shopping.

Brightness on a Bleak Horizon

Most marketers will see the effects of consumers cutting back on spending; yet signs point to eCommerce continuing to gain momentum. A Forrester report shows existing shoppers intend to increase Web purchasing with 84% indicating they plan to spend the same or more online in the coming 12 months. eCommerce is also gaining new consumers who recognize the benefits of online shopping, and in general, eCommerce tends to succeed in struggling economies thanks to its users and business model:

• The core online shopper, generally affluent, tech savvy and career-focused, is less affected by the economic downturn than most.

• The online business model provides value and convenience, key factors in tight economic times.

Five Key Trends Consumers react to economic changes, and five recent trends show why eCommerce is positioned well to withstand the current economic downturn.

Swapping Keys for Keyboards Historically high fuel prices have caused consumers to flock to online shopping sites to save time and gas. Catch phrases like "beat the crowds and shop online," "buy online and pick-up in store today," "shop anytime," or "browse 24/7" register with consumers. Even consumers visiting stores in person conduct preliminary shopping on the Web first.

Trading Down Although consumers are typically price conscious, for the first time in more than a decade, consumers rank low prices as the most important determinant of what and where they buy, outpacing product quality, customer service, the shopping experience and ease of shopping. This results in greater traffic to comparison shopping sites, discount stores, off-price chains, thrift stores, online auctions, resale chains and consumer-to-consumer sites.

Strategy Shopping Consumers indicate they now use the Web even more than before to manage their shopping, making fewer trips in order to save gas and using the Internet to research products, find store locations and determine if products are in stock. Marketers should keep this in mind and be sure consumers can easily find the information they want. Prominently featured store locators and capabilities that allow consumers to shop online and pick-up in store align with this trend.

Couponing and Deal Seeking The economic downturn has generated a long-term shift in coupon use and perception. Shoppers perceive eCommerce as a value driven channel where they can get better deals. With consumers actively searching for the best deals online, advertisers should emphasize discounts in their ad copy and throughout their Web site to engage thrifty consumers and expand keyword portfolios to include generic keywords and cast a wider net to capture these discount hungry consumers.

Cocooning In light of escalating prices, consumers increasingly cut out small indulgences and focus on things 'in the home.' This becomes commercially significant, because it leads to key behaviors including more in-home online shopping and increased investment in items that make home feel more luxurious and comfortable. Messages should communicate valuable, durable and high quality products that make home more enjoyable and provide a good value per entertainment dollar.

Marketers should leverage these shifts in consumer behavior, differentiate themselves from the competition and provide consumers with an experience that is equally compelling, yet more convenient and cost-effective than shopping in-store.