Editorial Articles

2009 has been another tough year for high street retailers, with well known outlets such as Borders and Threshers forced to close. Many brands are hoping the traditional Christmas rush will provide a much-needed boost to their annual sales. However, as our new European research reveals, retailers may have to weather the storm for a little longer before trading returns to pre-recession levels.

Last month we surveyed shoppers across Europe to find out how they are planning to spend their money this Christmas and discovered that most people will not be splashing the cash on gifts for friends and family over the festive season. In fact, we found that at least half of Europeans are planning on making cut-backs and spending less on presents and celebrations this year compared to last, with increases in Christmas expenditure unlikely across all European nations. In the UK, only 16 per cent of people plan to spend more on Christmas presents this year compared to one in 10 Germans, one in six Italians and one in five Spanish shoppers.

With this in mind, it is now more important than ever that brands take stock of the changing shopping habits of consumers - especially as spending online this year is likely to reach record levels. One of the key drivers for increased internet spending is the value add and discounts that are widely available. As our research suggests, cash strapped consumers are still as hungry as ever to make savings and this is shown by the increasing amount of time people are spending browsing online shopping portals and communities for Christmas gift suggestions at the lowest possible prices. We also found that more than two thirds of shoppers prefer to search independent sites and online communities for inspiration over blogs, websites and social networks. So what does this mean for retailers? And is there still time for one last push to encourage a shopping splurge on the high street and on the internet

Clearly consumers now value user generated content (UGC) more than ever before to help them make purchasing decisions. At Ciao we’ve been watching the developments closely over several years and the number of reviews written on our site and our online partner shops peaks annually during the last few months of the year, showing how important UGC is for shoppers on the look-out for gifts.

UGC and online communities offer a unique opportunity for retailers to interact and engage directly with their consumers. An added advantage for users looking for presents on community sites is the benefit of consumer reviews, where people can ask members’ advice and opinions to find the perfect gift and also track down the most reliable source to purchase it from. And with brands going all out to drive sales in the run up to the most lucrative time of year, they cannot afford to ignore the thoughts and feelings of their audience. It is vital that retailers do not rest on their laurels and instead encourage shoppers across Europe to loosen their purse strings, sooner rather than later, by engaging with their customers as well as offering them carefully targeted deals and promotions to incentivise their purchases.

It is more important than ever that retailers are mindful of their reputation online and that they put the steps in place to protect their image on the internet as well as promoting it and although Christmas is just around the corner, it’s still not too late for brands looking to improve sales this year. By developing a trusted online community and realising the potential of UGC to increase customer loyalty, companies across Europe can set themselves up to enhance their service and brand reputation and most importantly boost company performance and revenue during December and throughout 2010.

Author: Tom Hyde, Teamleader E-Commerce Ciao UK