Do online retailers have a better chance of beating the global recession than their bricks-and-mortar counterparts?
It's no secret that consumers are cutting back big time. Frugality is the new chic. Tight budgets and high fuel prices are leading to an increase in cocooning that can't be wholly attributed to bitter winter weather. Even New York City is reporting subway ridership has scaled back to levels not seen since the 1950s, as workers lose jobs and shoppers don't leave home to shop.
Hard to find bright spots in such scenarios, but grim economic times could bode better for online retailers than their beleaguered meatspace counterparts. A recent Penn, Schoen & Berland Associates survey finds 26 percent of consumers saying they'll shop more online if their personal financial situation worsens in the coming year.
These so-called "recession shoppers" aren't just buying online to save shoe leather and tire treads. They're hunting for rock-bottom prices, deep discounts and solid deals.
Most of all, recession shoppers love coupons.
- 68% of "recession shoppers" (and 79% of "weekly shoppers") purchased something online they wouldn't have otherwise because of a coupon or discount.
- 64% of "recession shoppers" (and 70% of "weekly shoppers") said they purchased something from a particular online retailer they wouldn't have otherwise because of a coupon or discount.
Additional findings include:
- 74% of online shoppers receive e-mail alerts from their favorite retailers
- Recession shoppers are 17 points more likely to research products or services online several times a week than average users
- Consumers - 34 year olds make more online purchases every month than any other age group
- 34% of those surveyed plan buy more online in 2009 than they did last year
While on the surface these findings would seem to bode well for online retailers, there are more than a few caveats and unknowns tied up in the findings. Where's the ROI? Where's the customer loyalty?
In short, are recession shoppers the customer segment retailers should work, and spend, to attract during tough times? Sales are sales, and orders are order. But the bottom line is still the bottom line, and profit matters. Navigating the treacherous waters of a recession is hard enough without being held hostage by customers insisting on ever-deeper discounts and ever-sweeter deals before they'll hit that 'buy' button.
Reader comments (6)
10:24PM on 2nd February 2009
Ecommerce continues to thrive regardless of recession. As it becomes more cost effective, markets are flooding with ecommerce businesses, upping the ante for marketing space. This attributes to the need for experienced and capable internet marketers. As customers become more frugal and savvy with Internet, it becomes more challenging for ecommerce businesses to compete and sustain a loyal customer base.
10:24PM on 2nd February 2009
Ecommerce continues to thrive regardless of recession. As it becomes more cost effective, markets are flooding with ecommerce businesses, upping the ante for marketing space. This attributes to the need for experienced and capable internet marketers. As customers become more frugal and savvy with Internet, it becomes more challenging for ecommerce businesses to compete and sustain a loyal customer base.
4:32AM on 4th February 2009
I recently came across Internet Retailer’s latest monthly survey which revealed that to build e-commerce sites that drive more traffic and sales, retailers are creating interactive page treatments and online merchants are making site optimization a top priority. The study revealed that 49.9% of merchants have rolled out a new site design in the past year, including 26.6% in the last six months and 13.3% within 90 days. By taking a more business-oriented approach to web site design, 81.7% of merchants also expect their latest redesign to attract a higher number of visitors and shoppers, compared with 76.7% that anticipate higher sales, 66.7% a higher sales conversion, 50% improved customer service and 48.3% better multi-channel sales.
7:09AM on 18th February 2009
This is a perfectly timed article on shopping trends. We have launched a new consumer electronics shopping website (TrueHotDeals) with web 2 features recently and already noticing the recession impact on customer purchases. Our site visits are growing at a good rate, and as the stores have to retain their sales in this economic downturn, their offers and discounts on products are much deeper now-a-days.
12:26PM on 18th February 2009
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9:04AM on 14th April 2009
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