Ten Years On: The Changing Face Of Christmas Consumption

Christmas Shopping

As Christmas Day 2002 approached retail analysts predicted that a whopping 10 million people would end up shopping online in the eight weeks leading up to the holidays. Ten million is a big number and understandably it was seen as a major breakthrough for those who had long predicted that the Web, still in its relative infancy as a commercial concern, would become the place to shop. Today, that figure looks distinctly unremarkable.

Over the last decade it has become dwarfed by a succession of record-breaking statistics. By 2012, 115m visits to UK shopping Web sites were made on one day alone. That day was 3 December, dubbed Mega Monday or sometimes Cyber Monday.

The first Monday of December has become by tradition the busiest pre-Christmas, Web shopping day of the year. Last year, £10,000 worth of goods were sold per second, Visa processed 6.8m credit card transactions and a total of £465m was spent – the equivalent to a quarter of the entire Christmas spend a decade earlier.

Expect those records to be broken again on 2 December this year, aka Mega Monday 2013. Web-based Christmas spending is set to top £10bn and, according to estimates, 12 pence in every pound spent will be done so online.

In reality, the Internet is responsible for a dramatic change in consumer behaviour and consumption patterns that businesses need to understand, forecast and most importantly, be ready for.

Consider that Christmas Day itself has become a major shopping day for the first time ever. Or that last Boxing Day became the UK’s biggest single e-commerce day as the nation spent a collective 14m hours browsing for bargains in what notionally we still call the “January sales”. Indeed, one in every 125 searches conducted online that day contained the word “sale” or “sales”.

The consequence of all of this activity is a substantial peak in web traffic for eCommerce businesses, not seen at other times of the year. For those providing the infrastructure that supports the business environment, as the Christmas lights are switched on across the nation, so companies such as Colt must ensure that the Internet does not go dark.

To be unprepared online would be like supermarkets not preparing for the Christmas rush and having most tills closed!

So how do retailers ensure their “online tills” are manned at the right times? Users will be familiar with periods of “patchy” Internet access. You’ve probably experienced that when the kids get home from school or on a Friday when everybody is working from home. The preferred solution is to provide uncontended and guaranteed bandwidth.

Operators and businesses have traditionally chosen one of two options. They will build their network’s access to the Internet in a way that caters for the maximum level of business that they are expecting. Or they won’t. They rely, instead, on the customer’s desire to do business despite latency issues. This is increasingly risky in a world of consumers with quick moving fingers!

There is an emerging third alternative – adoption of cloud technologies so that capacity can be scaled up and down as demand requires; manning and unmanning virtual “tills” as needed. The attraction of this model is clear: for the shopper it means an uninterrupted shopping experience; for the retailer it is the most cost efficient way of handling traffic peaks and troughs, avoiding the need to pay for capacity when that capacity is not being used.

Today’s fibre-based networks make it relatively easy to add extra capacity compared to older copper-based networks. And while only a few businesses have adopted this cloud-based approach to date – because it means fundamentally changing the way they think and work – expect that situation to change fast.

So what advice would I give retailers gearing up this Christmas? Look to explore models that allow for much more flexible consumption to help manage costs. And for shoppers? If you are going to shop online, do it wisely. Make sure the security on your laptop or device is up to the task. Be prepared to be patient then do your shopping at quieter times of day.

In the next 10 years elastic infrastructure will become a flexible enabler for business, not the cost inhibitor it is today. As retailers continue to rapidly innovate and evolve the digital interactive experience both in-store and on-line, capacity will need to be secure, on-demand and seem less. The curve will be exponential.

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Mark Leonard

Mark Leonard was appointed EVP, Infrastructure Services Unit (ISU) in January 2011, and is responsible for integrating the activities of Operations, Technology and IT. The ISU is one service unit that owns network, IT infrastructure operations, technology as well as internal IT. Mark joined Colt as Chief Information Officer (CIO) in February 2008 with the responsibility for the management and development of Colt's IT systems. He has extensive experience of IT within the telecoms sector, having held the position of CIO at Vodafone UK, IT Director at NTL, as well as a senior management role at IBM Global Services. Prior to working in the telecoms sector, Mark worked in senior IT roles in banking and retail.