With high US unemployment,nervous stock markets a volatile Europe and general uncertainty you have to wonder at the 15% growth estimates for on-line sales this year. Forrester estimates that this year online holiday sales will be $59.9B up 15% from the 2010 number of $51.7B. The growth rate and the sheer large numbers imply a huge shift in the Internet adoption behavior of consumers. Makes me recall an early piece of research on differentiating the Internet User-Non User and Online Buyer a topic of much interest in the early 2000's. It's fun to think of what has changed in the on-line space that allows sales to grow at 15% when most other parts of the economy is crawling at 1-2%. Here are some changes that are helping online sales:
- It's cheaper to shop online – no driving and gas costs and much less time spent on searching through each mall and store physically. Searching on Google or Yahoo is seen as free !
- Transaction trust was a huge problem in the early days of online shopping. That bad people would hack your credit card details was a huge concern that never seemed to go away. Today we are all far more comfortable giving out our credit card details on-line.
- Online and social media reviews allow a huge level of confidence in buying something that you have not seen or touched. If your friends are saying good things – it must be good!
- Returns are easy with most online retailers. Those with a brick and mortar store allow you to bring back the item you want to return to the store- so again there is a reduction in risk perception.
- Mobile and tablet devices make online shopping an anytime anywhere activity perhaps the first time in the human history of trade?
This shift in Internet buying behavior for holiday items signals a fundamental shift in the economy even if you do not sell Christmas gifts. Because no matter what your business is – your customers are ready more than ever to deal with you via the Internet.