Online Retailers Set For Christmas Price War

Online retailers in the UK are gearing up for their busiest period of the year as the peak Christmas shopping period approaches, with many firms set to discount items heavily in a bid to persuade people to make web payments on their sites.

The Daily Telegraph reports some companies are set to start promotions this week in order to take advantage of the expected ‘Black Friday’ rush. This originated in the US and refers to the first shopping day after the Thanksgiving holiday – which this year falls on November 22nd – when many retailers offer one-off deals, but the trend is starting to make its way across the Atlantic.

Amazon, for example, is expected to cut prices on around 1,000 items in the UK by up to 40 per cent to take advantage of the occasion, with its promotional activities to be twice as big as last year. This may be replicated by many of its rivals, as a study from the Centre for Economics and Business Research has stated prices in ecommerce stores are currently falling at their fastest rate for five years.

Managing director of Amazon.co.uk Christopher North was quoted by the Telegraph as saying: “Black Friday Deal Week offers millions of pounds of savings on hundreds of Christmas gifts as well as everyday essentials. From electric toothbrushes to the must-have video game or cookery book, it’s a great opportunity for customers to make savings on things they want for themselves as well as gifts for others.”

This year is set to be the biggest ever for the UK’s ecommerce sector, with recent figures from IMRG and Capgemini forecasting £4.6 billion is set to be spent online during the peak two-week period at the start of December. The firms also revealed this week that income for October has been solid as companies prepare for the rush.

It found British shoppers spent £6.7 billion over the internet last month, a 14 per cent increase from the same period in 2011. One category that performed particularly well was the gifts sector, which recorded growth of 62 per cent month-on-month. IMRG stated this reinforces projections that Christmas 2012 will be a record-breaking occasion for ecommerce in the UK.

Head of retail and technology at Capgemini Chris Webster added that while there is great potential for companies to take advantage of internet sales, they must not assume it is an easy route to success, particularly as many consumers are still struggling with their finances.

“With the economy slowly improving but with a highly uncertain future, online shoppers are spending – but only cautiously – as they save up prior to Christmas,” he said. “There is much growth to be tapped in the internet market, but knowing your target audience and matching their expectation with your offering is crucial.”

One step retailers can take to meet these demand is to embrace multiple channels, as the IMRG has suggested consumers are looking for new ways to buy goods. The group found 96 per cent of online shoppers expect to make a purchase online this Christmas, while 71 per cent would consider shopping via a tablet device and 41 per cent through their smartphone.

Dominic Monkhouse is the UK MD of managed hosting provider PEER 1. He has spent 14 years working in sales, marketing and business management within the IT sector. Prior to PEER 1, he held senior positions with Rackspace and IT support company IT Lab. Dominic is regularly interviewed by and quoted in business and technology publications including the Financial Times, Data Centre Dynamics, and Computer Business Review. Dominic has a BSc in Agricultural and Food Marketing from Newcastle and a MBA from Sheffield Business School.