Xmas Online Shopping Boost

Another bumper Christmas for online retailers

Online retailers have had another successful Christmas, according to new figures, but separate research indicates that many shoppers are still worried about security on the internet, and that retailers could do more to boost sales.

A new survey released by e-commerce software vendor Actinic reported an average increase in turnover among respondents during November and December of 96 percent.

Most of the increases were due to customers spending more online, although the number of consumers using the internet for shopping also rose, by around 30 percent, said the firm. Three-quarters of respondents said they expected further growth in 2007.

Industry body the Interactive Media in Retail Group (IMRG) has revised its predictions for internet retail sales upwards, saying they will increase by over 40 percent from 2005, to £7.5bn in the 10 weeks running up to Christmas day. The month of December alone will account for over £3bn, the IMRG added.

Supermarket giant Tesco, meanwhile, reported 1.3 million customer orders in the four weeks to Christmas, an increase of around 30 percent on 2005, while Amazon delivered over 600,000 items on its busiest ever day, December 4, compared with a previous record of 480,000.

But according to new research from web security specialist Trend Micro, only around half of consumers are fully confident in the safety of the internet. The firm's Internet Confidence Safety Survey also found that similar numbers were unconvinced about their internet security software, while over two-thirds said they thought the internet would become less safe over the coming six months.

Trend's business unit manager for northern Europe, Pat Dunne, denied that this lack of confidence had impacted shopping behaviour, but added that " vendors should continue to educate users about the potential risks involved in online shopping, as well as providing relevant security software".

In new research published this week, Forrester analyst Reineke Reitsma advised online retailers looking to increase sales to reassure visitors by ensuring they "clearly display their security measures on the home page".

She also recommended retailers with a strong European presence to offer a broad range of payment methods, both online and offline, as shoppers across the continent have varied preferences, including bank transfers and cheques.

Despite the strong Christmas performance of online merchants, however, many smaller retailers still underestimate the revenue-generating potential of the internet, according to Actinic marketing manager Bruce Townsend.

"The biggest mistake smaller firms are making is that many are still not online at all," he argued. "They should use a software package where most of the technical stuff is done for them and concentrate on the marketing and promotions side."

The best strategy for increased revenue generation could be to specialise in niche products that the largest online retailers do not stock, he added.