It wasn’t only the high street that suffered a festive slowdown – on-line shopping in general also dipped 3% during the traditionally lucrative period. However, some e-tailers did buck this trend and a study shows that while consumers spent less, more shoppers went on-line to shop in November and December 2008.

Now e-commerce forecasters are predicting that if businesses are hoping to beat the credit crunch – and have a successful, long-term business – then e-tail is the only way to do it.

At the same time e-rail analysts have revealed that the fastest growing on-line product genre in recent months has been sports and fitness. Next up was video games and consoles. In third place was clothing and accessories.

Those e-tailers suffering the biggest credit crunch hit include office supplies, music and movies, jewellery and computer hardware.

Are you an e-tailer that is bucking or confirming this trend?

It wasn’t only the high street that suffered a festive slowdown – on-line shopping in general also dipped 3% during the traditionally lucrative period. However, some e-tailers did buck this trend and a study shows that while consumers spent less, more shoppers went on-line to shop in November and December 2008.

Now e-commerce forecasters are predicting that if businesses are hoping to beat the credit crunch – and have a successful, long-term business – then e-tail is the only way to do it.

At the same time e-rail analysts have revealed that the fastest growing on-line product genre in recent months has been sports and fitness. Next up was video games and consoles. In third place was clothing and accessories.

Those e-tailers suffering the biggest credit crunch hit include office supplies, music and movies, jewellery and computer hardware.

Are you an e-tailer that is bucking or confirming this trend?

In a move projected to strengthen the UK economy, the Chancellor has this afternoon announced that the standard rate of VAT (Value Added Tax) will be cut from the 1st of December 2008 for 13 months. The previous rate of 17.5% has been cut to 15% to encourage consumer spending and stimulate demand.

While it should have this effect, it has also been labelled a ‘retailer nightmare’ as thousands of shops up-and-down the country are faced with re-labelling their products. Luckily for an e-commerce store, this process can be as simple as flicking a switch

Most stores have a setting for VAT which can be easily changed via an administration area giving a considerable advantage over offline retailers.  Not that this is all plain-sailing however; you will still need to check that your pricing is consistent if you do have an offline presence such as a mail-order catalogue or store.

Whether this will indeed result in more custom is a matter of conjecture. If your standard product retails at say £100 including VAT then a customer will save about £2.23 if the full saving is passed on to the customer, hardly enough to make them buy a few more.  It also seems likely that many retailers will elect to ‘absorb’ these savings into prices. Also, if your customers are mainly businesses with balanced outgoings then the VAT change is largely neutral.

Either way in what was expected to be a good Christmas for online businesses, despite the Credit Crunch any additional stimulus can only be a good thing – just make sure you save a little back for when taxes go back up in the near future…

“Ecommerce will buck retail trends,” said David J Smith of the IMRG at a conference earlier in the year, “and continue to grow. When the going gets tough, consumers go online.” WebCreation UK are keen to assist in helping all businesses looking to sell online via our fantastic ecommerce solutions.

Did you know?

- IMRG Index shows that, between April 2000 and end of 2007 British ecommerce has grown 5213%. The total UK spend in 2007 was £46.6bn.

- 15p in the consumer pound is spent online. Despite economic worries, Q108 saw the biggest total spend online of any quarter since inception: £13bn (or £213 per head of population).

- The IMRG forceasts that British online spending will increase every year to 2012.

Demographics

-The gender breakdown of British online shoppers is (give or take less than 1%): 50/50 Male/Female.

- 21% of online spending comes from women 18-34. 50% of women over 25 buy clothing online.

- The fast growing group of online shoppers are the Over 55s. Over 55s will soon surpass the 35-44 year olds soon as the biggest group of online shoppers.

If you would like to discuss how we can help your business through the credit crunch or are simply looking for a new website design, please contact us.