Anticipating Online Christmas Sales

This week brings in new reports - one from card issuer MasterCard and the other from Chase Paymentech after their review on November and Christmas e-commerce sales figures. The report compares sales from 2009 and 2010, showing more good news for web merchants - another year of significant online shopping growth.

MasterCard's SpendingPulse report has seen sales increase by 12% in November compared to 2009, with apparel clinching the best results in the industry sector with 22% increases, registering, "the twelfth consecutive month of double-digit growth online". Looking specifically at children's clothes, they have seen growth of 33.3% and shoes at 32.7%, though women's online apparel shows a more modest 7% growth.


Chase are expecting 2010 believe that UK shoppers will be spending an estimated £11.5bn throughout the 10 week holiday season, and with last year's figures in mind, this would be a £2.6bn increase - a huge 28.8% improvement over this period.


MoneyDashboard has reported that almost 50% of consumers surveyed are intending to do the majority of their Christmas shopping online, taking their business away from the high street and on to the web - a general trend that they expect to continue.

The high street still has its uses, even for the most avid of online shoppers

This is more good news for online merchants, who over this 10 week season, on average, take just under a quarter of their annual sales.


With the last few days of online shopping ticking away, web shops are almost ready to take stock of their year before the final critical period of January sales before they can fully re-asses their 2011 business strategy, and I look forward to publishing results in the new year to see if the above expectations come to fruition.




Dan Robertson

E-Commerce Payment Trends - Germany vs the UK and the rest of Europe

This week, a study released by Deutsche Card Services gave an interesting insight into online shopping and payment trends. Compiled with data from 24 million transactions, it is predominantly about the German market, but also including notable comparisons with the UK and the rest of Europe. Though this report is available for purchase on the Deutche Card Services shop, I though it worth summarising the key points raised in this post.


Seasonal Fluctuations
In comparison to stationary businesses, who often find a lull in summer sales, e-commerce found that seasonal fluctuations across the year were small - fluctuations that are levelling more in comparison to previous years. Germany and UK were found to have the most even spread of sales across the year, bearing in mind one exception of December, where sales increase with strong Christmas demand.


Shopping Day of the Week
For shopping across European sites, the best day for sales has moved from Tuesday to Monday. The one differentiator for Germany is that an above average level of sales are occurring on Sundays, a non-working day, which is dissimilar to the rest of Europe. German women have overtaken men in online shopping volume, but have a lower spend than their male counterparts. The European share of women shopping in e-commerce is 40%, whose main shopping hours are during core working hours (8am-6pm) but, unlike Germany, women are spending more online than men.


Transaction Values
As one might expect under current financial pressures, average transaction spends have fallen. The record high of €84.31 has fallen in Germany, the UK and the rest of Europe to €65.35, but it is worth noting that, though the number of €100-500 and €500+ purchases have fallen, the €0.01 - 10 purchase band has increased in volume, possibly suggesting that the downloads market is strengthening.


Local Payment Methods
The local payment methods in Germany are Sofort, ELV and Giropay. Giropay is now the fastest growing payment method in Germany, making room amongst the once dominant bank transfer option. Credit cards are also gaining more momentum as a preferred payment option in a market where they have, until recently, had a very low exposure.

More dominant than International payment methods like Visa & MasterCard,
German consumers are far more likely to use their local options to shop

Conclusion
As much as there are growing similarities between the UK and German e-commerce market places, there are still many disparities that are worth noting if you are an EU-based retailer selling to Germany. Taking note of popular purchasing days, the changes in average spending trends and gender differences could prompt business strategy changes and the way you sell. And if you are selling to Germany, and do not support Giropay, Sofort and ELV, by accepting these methods you could substantially increase sales in this strong market.


For more information, please feel free to contact me at daniel.robertson@moneybookers.com




Dan Robertson






Alternate Payment Methods - Part II will be published soon
The report summarised above can be found at: deutsche-card-services.com

Alternate Payment Methods, Part 1 - E-Wallets

Being an online retailer has never been so good. As we slowly but surely ease out of the recession towards the busiest time of the retail year, people are not strapped for cash, but are still on the look out cheap deals on-line. More and more people are gaining confidence to step in from the high street and look online for the best deals, particularly that once wary bracket of consumers aged 45 and over, who are putting more trust in the e-commerce way of life.

It would be easy to relax and watch the orders flood in, though, as we all know, being complacent in the world of online retail can be a dangerous path to take. Shopping cart abandonment has shown little sign of dropping from it's 2008 level of 75% (Core Metric(US) 2008 - also confirmed by merchants I speak with on a day to day basis), meaning that 3/4 customers with items in their basket aren't finishing the online shopping life cycle.

Watching from the other side, working in the payments industry, the reasons behind such high drop out levels is all too clear. There are multiple key reasons, one of which I shall focus on here, e-walets, and the others in subsequent posts, namely:

- E-wallets
- International vs Local payment methods
- Bank Transfers
- Security and Anti-Fraud
- M-payments (mobile payments)



E-Wallets:
Otherwise known as ''digital wallets', e-wallets are an electronic way of storing money that allows for quick, secure transfers and payments. Rather than fumbling around for a list of card details, users merely have to use an email address and password. This simplified payment method encourages higher customer conversion due to the benefit of not requiring a card to be present and the speed of being able to pay.

The major international e-Wallets:

e-wallet             Account holders:         Main Markets:
PayPal              140 million                   North America and Europe
AliPay               300 million                   China
Moneybookers    15 million                     Europe
DineroMail          2 million                      Latin America

Other main wallets:
Moneta, WebMoney and Yandex in Russia
Click & Buy in Germany

With nearly 500 million account holders between these 4 methods alone,
e-wallets are the fastest growing payment method in the world

Depending on the geographical location of where a merchant sells their products, checkout pages need to offer options to their customers to pay to maximise conversion. If you discover that your checkout abandonment is high from international shoppers, perhaps in South America for example, consider that only 80% of credit cards issued in Latin America are accepted internationally (DineroMail, 2010) and that payment preference is e-wallet. This is the same story for many nations, and with e-wallet payments being by-far the world's fasted growing payment method, it could be costly not to factor in this payment option for customers.

Conclusion:
Consider where your customers and potential customers are based, and consider the question, 'is everyone able to use their preferred payment method on my site?'. If the answer to this question is 'no', applying the relevant e-wallet option to your checkout page could be the first step to increasing you customer conversion, staying ahead of the competition, and maximising those Christmas sales.






Dan Robertson

First thoughts - Bridging the Gap

Working in the payments industry in the e-commerce sector, it quickly becomes clear that the complexity and closed-nit network of payments professionals often mean that there is a disparity in knowledge between them and those in the e-commerce sphere - information that could significantly improve web revenue streams, reduce costs and direct growth strategies.


As a bit of background, I started working in the payments industry as a cards and payments recruitment consultant at Spencer Rose in 2008, sourcing technical and business professionals. I have since moved to Moneybookers, a payment service provider enabling online merchants to securely accept card payments, not only with standard international card schemes, but with over one hundred of the myriad of local options across the world, providing true global e-commerce opportunities.


It is my goal within these posts to bridge the gap between e-commerce and the payments sectors - share information, opinions and industry updates. I hope you find the upcoming posts interesting, thought provoking and beneficial to your business.




Dan Robertson