More shoppers go online with Christmas lists

Business Opinion: Along with jingling bells, clicking mice are set to become one of the traditional sounds of the Christmas season, writes Karlin Lillington

The last few years have seen gradual growth in the number of people shopping online - about 20 per cent per year. This year, some 63 per cent of internet users say they will do some holiday shopping from their PCs.

US consumers are expected to spend about $16.8 billion (€18.8 billion) online during November and December, an increase of 21 per cent from the same period in 2002, according to Jupiter Research.

British figures record similar growth. Britons are expected to spend £3.34 billion (€4.78 billion) online this Christmas, £204 million of that on electrical goods alone, according to a survey done by Royal Mail.

This year, however, something new is happening. Spending is already up sharply this year compared to last year, with Nelson Net Ratings reporting that online gift-buying rose 55 per cent on last year in November in the US, hitting an extraordinary $8.5 billion.

That means Jupiter's guesses might be too conservative. But the really significant fact is when the shopping started, not in dribs and drabs, but this time, in earnest: November.

The November date indicates that this is premeditated shopping, not shopping online as an afterthought, or panic searching for a gift at the 11th hour.

People have clearly decided that there are benefits to tracking down presents online and are taking the PC as their starting point rather than as a novelty approach (the simply-because-I-can syndrome, very prevalent in the late 1990s).

The early approach also indicates that consumers acknowledge one of the facts (in earlier years, drawbacks) of online shopping: gifts need to be packaged and shipped and that takes time.

In the first years of net shopping, the press was full of stories about frustrated consumers not getting their gifts delivered until well into January.

Thus were the early lessons of online buying learned. Companies discovered they had to deal with last minute deluges of orders that could not be met with their existing infrastructure - technological or human.

Consumers also realised that they couldn't just wait until the very last minute. It's bad enough when you're talking about fighting the crowds on Jervis or Grafton Street, but at least there's a chance of coming in under the wire with an actual gift. Shopping online on that kind of schedule means you'll have to explain the present in a card.

Or it used to. Many retailers this year are promising delivery even for orders made in the final days of the holiday season, indicating the kind of advanced planning and fine-tuning that has gone on in the online retail business.

But according to a Yahoo study, most of us won't need such services because we aren't such procrastinators.

The most popular online shopping day is apparently the second Monday in December, indicating that most people get that first panic attack while at work, having endured the first December wave of decorations, holiday music, and Christmas adverts (they're around earlier, but most of us, to preserve our sanity, just refuse to acknowledge them until December 1st).

Another significant shift is that women have edged out men as the biggest online Christmas shoppers this year, according to analyst Forrester Research. Some 52 per cent of online buyers are female in the US, which portends major shifts in the kinds of products purchased online.

Already, sales of health and beauty products are up by more than 93 per cent this year, compared with 30 per cent for books, and -tellingly - growth of just 13 per cent for the male dominated area of computer hardware.

In the past, the hot areas for online retailing have been consumer electronics, computer hardware, books, apparel, toys and music. Not that books are suffering: Amazon (which admittedly sells a lot more than books these days) is predicting sales of between 23 per cent and 34 per cent, or $1.76 billion to $1.91 billion, compared to the same quarter last year.

But while the increases in those who choose to shop from a computer screen are impressive, they still represent only a tiny drop in the overall sales market.

This year, online sales will total a measly 3 per cent of the $217.4 billion seen in offline sales in the US, says the National Retail Federation.

In total, online sales figures are up just about 1 per cent on last year, compared with an expected increase of about 5.7 per cent in offline sales, according to the NRF.

So online retailers haven't, as once predicted, done in brick and mortar companies. Indeed, the smarter offline retailers now have an online sales presence as well, maximising their holiday cheer.