E-CHRISTMAS 2000: from desktop to doorstep

Introduction

• The crash in the business-to-consumer market during 2000 led to greater pressure to perform well during Christmas 2000, in spite of reduced advertising budgets.
• Late deliveries and poor customer service in 1999 led to tighter e-commerce regulations in the UK and US.

Sales: forecasts and outcome

• Research companies predicted that online spending over the Christmas 2000 period would reach approximately $0.5 billion in the UK and $10 billion in the US, and both estimates were proved to be accurate.
• These figures represented a rise of around 100% on Christmas 1999 in the UK and around 50% on Christmas 1999 in the US.
• Books, holidays, music and electrical goods were most popular with consumers on both sides of the Atlantic.
• In the UK, Amazon.co.uk attracted the largest number of visitors, with Argos and Tesco performing well.

The consumer

• Excellent customer service proved more attractive to consumers than low prices.
• The pull of a trusted brand online meant a successful year for clicks and mortar retailers.
• The percentage of all shoppers using e-tail sites at Christmas remains low, but average spends by online customers have risen steeply.
• Consumers remain anxious about credit card fraud and financially unstable online retailers.

The e-tailer

• Clicks and mortar stores performed well, with Tesco topping the sales charts in the UK.
• Offline advertising by UK dotcoms fell for the first time in November 2000, leading to a rise in more economic means of promotion, including e-mail advertising.
• E-tailers improved customer service through live chat, gift recommendations and wishlists facilities.
• Special Christmas-orientated interfaces were developed and server capacity was upgraded to handle heavy traffic.
• Sales made over mobile devices were negligible, while digital TV platform Open? suffered from credit card fraud.

The final mile

• Fulfilment strategies were planned early in 2000, and many e-tailers had alternative crisis strategies in place.
• Real-time inventory checking software and delivery tracking made for greater accountability.
• Many e-tailers outsourced the logistics aspect or partnered with firms which excel in this area.
• Efforts were made to make delivery as convenient as possible: consumers were able to collect goods from high-street stores and delivery boxes that attach to the home were introduced.
• Dates for last orders were set with great care, while consumers were given a greater number of ways to return goods than previously.

The future

• Clicks and mortar retailers with deep pockets will continue to flourish.
• E-tail sites will increasingly add interactive features.
• E-tailers may be affected by global discussions concerning internet sales taxes.
• Large e-tailers will broaden their range of goods, to the detriment of medium-sized specialists.
• Reworked interfaces will see interactive TV and wireless internet devices playing a much larger role in Christmas 2001.
• Partnerships between successful e-tailers and traditional offline retailers will become increasingly common.