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Despite new figures from the British Retail Consortium showing improved confidence that Christmas sales on the high street this year will be better than last, bricks and mortar stores are still struggling to compete with the web.
Over 40 per cent of retailers said they thought sales would top last year's, with none believing this year would be worse than Christmas 2008, but a closer look will show that high street retailers remain in a precarious position.
Firstly, last year was simply a disaster all round - even the web struggled a bit as the recession kicked in. Secondly, nearly half of retailers said the level of promotions offered in store is greater than last Christmas - clearly these firms are pulling out all the stops to desperately win over customers.
"Shop price inflation is now stable but shoppers continue to be cautious about spending," said Mike Watkins, a senior manager with research firm Nielsen.
"As a result we are seeing more price cuts, deeper promotions and increased benefits from loyalty schemes in particular by the major food retailers. Christmas is a battle for shopper loyalty."
So what of the web? Well, sadly for the high street, its small blip in growth during the dark days of the recession and as a result of the recent Royal Mail strikes seems to be over.
According to recent YouGov research commissioned by online security and web verification firm VeriSign, UK consumers plan to spend 32 pence in every pound online this year, with 86 per cent buying at least some of their Christmas shopping online.
"Consumers are especially bargain-hungry at this time of year," explained Phil D'Angio, director at VeriSign.
"While bricks and mortar stores are busy competing for consumers' attention, the fact is that consumers are now spending around a third of their cash online. Online retailers can pass the benefit of their lower overheads on to customers through lower prices, but this makes the online world particularly competitive."
Naturally, D'Angio argued that one major way for online stores to differentiate is through improving security, ie by signing up to his firm's Extended Validation (EV) SSL Certificates scheme.
While improved and highly visible security measures will certainly go some way to encouraging more people to try online shopping, it's problems with delivery systems, lack of multi-channel strategies and, in Europe, cross-border commerce failings which must also be addressed if this channel is to thrive as it should.
11 Dec 2009
