Monday, September 18, 2006

Work early for Christmas

Are you ready for Christmas?

Online performance, Internet interactivity and sales performance for the festive season is a must this year. The alternative, gardening in February, is not a lot of fun.

Online retail sales for November and December 2005 were up 20% on the previous year, outperforming the high street by a factor of eight. Way back then, this represented 6.8% of all UK retail sales.

I have already reported research that suggests British retail spending over the Internet is set to double, hitting almost 40 billion pounds, by 2010. This year there will be a surge. It would surprise few people to see an additional 25% sales increase online this year over last, the increase could be even more. This would pitch online sales at £3.75 to £4bn over November/December 2006.

This means, if you have any connection with online retailing you have to be working up your programme now. Of course your web site should already have enjoyed a comprehensive makeover. This will mean it will get its tinsel on time and in the right places.

You will check that server can cope with huge surgesn traffic and high throughput of purchases. You will have a group ready to respond to questions and issues and perhaps a method for helping people who want to ask questions or comment online.

If the PR industry gets this wrong it will never be forgiven. Think in terms of one in every three pounds spent by householders will be via the Internet (and this is not just for the young and trendy, my 89 year old Mother-in-law depends on Internet ordered meals for her lunches).

The evidence of the power of Internet retailing keeps mounting.

John Lewis reported a 25% surge in profits last week fuelled by a huge increase in internet sales. The department store group, which also owns the Waitrose supermarket chain, said it had enjoyed an 'excellent' half year.

Meanwhile, the UK Town Centre Retailing 2006 report by retail analysts Verdict Research found town centre spending fell to £122.3 billion in 2005, a 0.6 per cent drop on 2004.

Clothing retailer Next Plc posted an increase in first-half profits on Wednesday last, as a surge in its catalogue and Internet business helped offset a drop in same-store sales.

Chocolate retailer Thorntons Plc posted a 36 percent drop in full year profits on Tuesday last because of sluggish high street demand. On a positive note, demand for chocolates over the company's Internet site grew 6.4 percent over the past 12 months to 5.5 million pounds.

Shoppers spent £767 million less in town centre shops last year, turning to the internet, retail villages and supermarkets that are selling more and more non-food items like TVs and clothes.

Insurance giant Aviva, one of our biggest financial-services group, said it would cut 4,000 jobs in the UK, in part because customers were no longer shy about doing big financial transactions online.

Online, non car dealer, second hand car sales has increased share from 3% in 1998 to 7% in 2005.

Last week the Civil Aviation Authority issued a report revealing there were twice as many failures of old-style holiday companies this year than last with people booking flights and holiday accommodation direct with vendors via the Internet.

I just hope that the PR industry is ready for all this.

This is coming at us really fast.