The good news coming from the US economic statistics seems to have instilled a small dose of optimism that is evidenced in end of the year spending by households who have struggled for quite a few years. Similarly, the UK economy continues to perform relatively well and British consumers have indulged in a last-minute shopping spree. But not everyone in ‘the nation of shopkeepers’ has benefited equally from this surge of consumer spending.
In the US, the falling price of petrol, sustained growth in job creation and a fast growing economy has boosted retails sales especially in the online shopping sector. Total retail sales from Black Friday – the day after Thanksgiving – through to Christmas Eve increased by 5.5 per cent over the same period of 2013. But the bulk of the increase came from online shopping which is slowly but surely becoming the favoured way of shopping for most consumers.
Retail industry analysts attribute this growth to the increasing ease of online shopping. Two important developments are giving momentum to the increasing popularity of e-commerce. Smartphone apps are making it much easier to give in to impulsive buying as one does not even have to be at home tied to a desktop computer to buy the gifts one may want. Amazon claims that in the US nearly 60 per cent of its Christmas season sales came from its Smartphone app – double the figure achieved in 2013.
Another important development has been the introduction of ‘click and collect’ which has solved all sorts of issues around ensuring delivery on time. This method of online retail selling has been most successful in the UK where the traditional Boxing Day sales are changing fast. Huge discounts no longer attract the massive crowds of thrifty shoppers, despite the traditional TV news footage of retailers braving the winter cold for hours to be the first to enter physical retail outlets in search of bargains.
Anyone who has ever bought anything online must have been inundated with emails from online retailers offering one-time special offers on various days in the Christmas season. Online traders seem to be able to offer better discounts which for cost-conscious consumers are an added bonus. It is a fact that most online retailers can still prosper with a thinner profit margin than that which physical retailers can afford.
Technology security has also become more reliable and more people trust paying online
Technology security has also become more reliable and more people trust paying online far more than they did a decade ago. Smartphone applications are becoming more secure where payments are concerned and the leading credit card companies – Visa and MasterCard – are introducing more sophisticated software and hardware to discourage fraud that has always been a big issue in online payment systems.
Traditional shopping Meccas, like London’s Oxford Street and Paris’s Rue de Rivoli, will always remain popular with shoppers who have an emotional attachment to the rites of shopping in the festive season in physical retail outlets. A Christmas break away from home and in a glamorous city like Paris, London or New York cannot be complete without a ‘shop until you drop’ experience in the huge shopping malls that characterise most metropolises.
One other major effect of internet shopping has been the extension of the traditional sales period. In the UK, online shopping on Boxing Day was estimated to have been 40 per cent higher than in 2013. Rather than try to burn out some of the excessive calories consumed on Christmas Day, most shoppers prefer to sit on their sofas at home and buy gifts they would have liked to receive but never did.
I have been unable to gather information on local online sales. I know from anecdotal evidence that online shopping is gaining in strength in Malta with consumers even buying their TV sets and kitchen cabinets online. Few physical retailers are really enticing consumers to buy from them by offering online shopping facilities combined with home delivery through a courier service.
Local retailers’ websites generally remain uninteresting and some do not even advertise their prices. With a completely liberalised online market, consumers find it that much easier to compare and contrast offers for the goods they want to buy and few would consider loyalty to a local retailer as a top priority when deciding from whom to buy.
Understandably, convenience and good value for money are the main issues that consumers take in consideration when spending their hard-earned money. Who can blame consumers who are loyal to their pocket?
johncassarwhite@yahoo.com