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2 November 2009

Online Retailers Worried About Royal Mail Strike Affecting Christmas Sales

A survey of online retailers carried out by IMRG (Interactive Retail in Media Group) has found that 85% believe that the continued threat of postal strike action will discourage customers from placing orders with them for Christmas.

Although only a third of them have experienced a shortfall in visitor numbers (averaging 24%) two-thirds have seen a near average 30% fall in revenue since the strike began. Visitor figures from IMRG Member Experian Hitwise bear this out. The internet monitoring firm saw moderate decreases in traffic to online retail sites between w/e October 10th and 17th, seemingly to have been seasonal, but with traffic increasing consistently over the last couple of weeks.

Asked whether they were receiving specific enquiries from consumers about delivery arrangements in relation to the threatened strike action nearly 82% of the retailers surveyed said they had.

In a worrying development for Royal Mail, 60% of retailers were finding their new carrier arrangements proving more efficient and over two-thirds were considering not returning to Royal Mail after the strike.

David Smith, Director of Operations for IMRG said “It is no surprise that online retailers are becoming more concerned as the strike develops. Christmas is the most important sales period of the year for most retailers and any year on year shortfall will affect them greatly. Although we have seen year on year sales averaging 14% growth during 2009, with the long climb out of recession and continued faltering consumer confidence the Christmas sales period will prove a challenge for most retailers even without the strike action”.

In yet another development, Robin Goad of Experian Hitwise commented, “Last week the websites of high street retailers received 16.5% more UK Internet visits than the online only retail players. This compares with 9.3% for the same week last year. Although it should be stated that this is a long term trend and the gap between the two categories has been increasing for a while, there is a danger that more cautious customers may choose retailers with physical locations when ordering online in the run up to Christmas”.