Online Christmas sales are set to increase by 10% this year as more consumers use the internet for their Christmas gift and food shopping, according to research from the business advisory firm, Deloitte.  Total online spend is estimated to reach £4.7 billion this year, up 10% on 2007 (£4.2 billion). 

Ian Geddes, Lead Retail Consulting partner at Deloitte, said: “Although our research shows that the overall number of consumers using the internet for Christmas shopping is stable, these people are using the internet more often and spending more online than ever before.  Consumers who do most of their shopping online are expecting to splash out over 15% more than people who will rely mainly on traditional bricks-and-mortar retail for their Christmas shopping.”

Our research shows that online consumers are planning to spend an average of £773 overall this Christmas compared with £655 for the total population.  And unlike shoppers in other channels whose year-on-year planned spend is declining, online shoppers are planning to spend the same as last year on gifts and food this Christmas.

People in the North West are most likely to spend online, with 22% of consumers in this region planning to do most of their gift shopping over the internet.  Consumers in the South West (19%) and Scotland (18%) have also embraced online retail.  Those in Northern Ireland (2%), the North East (7%) and Yorkshire (11%) are least likely.  Men (18%) are more likely to use the internet for their Christmas shopping than women (13%).

Retailers are increasingly looking to take advantage of the continued rise of online shopping.  The number of retailer’s offering transactional websites has seen another steep rise this year.  81% now offer online stores, up from 71% last year and 51% in 2006, and the growing importance of online is evident with 90% of respondents saying they expect their online sales to grow as a proportion of total sales.  However, online sales are still a small proportion of most retailers’ revenue.  56% of retailers report online sales accounting for less than 10% of their total, although a further 22% report online sales contribution of over 25%.

Anish Patel, Director in Retail Consulting at Deloitte, said: “Online retailing is still growing, showing more resilience to the current economic storm.  Internet retailers should be optimistic as price focused shoppers head online for convenience and to search for the best deals.  Although online retailers are well positioned to make the best of a potentially lean Christmas, their online strategies need to be sophisticated and well executed, focusing on better customer insight and innovative marketing.”

One new trend developing this year is the increasing popularity of discounts being offered through email or voucher websites.  Data from Hitwise, the online competitive intelligence provider, show the number of UK internet searches for voucher websites in October 2008 was 133% higher than the same period last year.  Internet traffic to voucher websites has risen 45% in this time whilst the number of visits to online retailers direct from vouchers sites has risen from 1 in 400 last October to 1 in 200 this year.

Patel said: “Retailers are making clever use of ‘viral marketing’, tapping into a segment of their customer base who may not encounter advertising through the traditional media.”

Download our full press release 'Online sales set to rise by 10% this Christmas'. (with supporting tables) (PDF, 167KB)

Ends

About this survey 
The survey findings were based on consumer data obtained by market research undertaken by TNS on behalf of Deloitte. Over 1000 adults aged 16+ were interviewed between August 29th and August 31st 2008 and again between October 31st and November 2nd.  The results of the second survey showed no material change to the original results. The respondents were selected according to a quota sample designed to be representative of all UK adults. Replies were also received from questionnaires sent out to over 350 of the United Kingdom’s retailers.  The retailers were from a cross-section of the industry.

About Deloitte
In this press release references to Deloitte are references to Deloitte LLP, which is among the country's leading professional services firms.

Deloitte LLP is the United Kingdom member firm of Deloitte Touche Tohmatsu (‘DTT’), a Swiss Verein, whose member firms are legally separate and independent entities. Please see www.deloitte.co.uk\about for a detailed description of the legal structure of DTT and its member firms.

The information contained in this press release is correct at the time of going to press.