Credit Crunch - Crisis or Opportunity?
For example, online sales in UK (Europe's largest online market) in first 6 months of 08 were up 38% at £26.5bn. THis is the equivalent of 17p in every £1! Overall, this tracks the changes across Europe where online sales have doubled in the last 4 years. While shop sales have fallen in this same period individual companies seem to be benefitting from this trend, e.g. Mothercare (UK) 28% increase in online sales in 15 weeks to mid July while its shops saw a 1% decline, DSG (Electrical retailers) saw e-commerce growth of 6% while its shops declined by 7%. And this trend seems to be putting Europe at the forefront of e-commerce. This at a time when it is still only 42% of the European population who are connected to broadband internet. However, with phones featuring internet access increasingly as standard, there are now 150 million people who shop over the internet (still only 1/3 of the total population). Countries like the UK, Europe's online leader, has registered 60% as many sales online as the US, with only 1/5 the population!
It is believed this points to the start of a transformation of buying habits as consumers seem more willing to buy goods which even require fitting, a clear distinction which prevented people from exploring online in times past. For example, Glasses Direct receives an order for spectacles every 10 minutes. Increasingly this is evidence of people browsing and even specifying their purchases online or in actual stroes before heading back to the net to make a final purchase. Certainly with discounts and bargains costing 50% or less on sites such as eBay, established vendors will need to focus ont heir online offerings to ensure they are not merely a high price shop window, with their browsing customers heading elsewhere to make a final purchase. Online offerings need to compare themselves to their direct competitors, and potentially indirect competitors such as eBay and Amazon, to establish a price and service differential to both retain their existing customer base, and position themselves for this rise in online purchases.
