Online Shopping: Where Did Your Customers Shop Last Season?

Last Christmas holiday season fell during a time of high gas prices and high heating costs. Those two things alone should have impacted holiday spending according to analysts; but that didn't happen thanks to the continued increase in Internet traffic.

In fact 4th quarter on-line sales have increased between 20 and 30% each year since 2001 and show no sign of slowing down. Why the consistent growth? Consumers list the following reasons in order of importance according to a recent survey by Goldman Sachs, Harris Interactive and Nielsen / NetRatings: lower prices, wider selection, avoiding crowds, home delivery, and ease of comparison shopping. For these reasons consumers have increased holiday spending on-line from 16% to 22% of purchases, while decreasing spending in traditional stores from 78% to 72% since 2002. Catalog sales have maintained a steady 6% of spending. Another study showed an even more dramatic shift with the internet at 33% to the brick-and-mortar stores 59%. Whatever the figures, it is hard to argue the increasing impact of on-line commerce. A steady and dramatic shift is taking place.

What does this mean to our local businesses? We must adjust to this new reality. Consumers won't always wait for the special Christmas display in our stores, but will strike when an idea hits them whether it be in the middle of an August night, or at home on a holiday just browsing the internet. The feeling of comparing, and getting a good deal and finding something that maybe your neighbor or loved one hasn't seen on every corner is addictive.

As a retailer, here are some tips to get the most out of this trend for your business whether it be for each coming holiday season, or throughout the year. First, know your customers. Ask questions, take notes. Second, offer what your customers want, and pay particular notice to the way they want it and figure out how to get it to them just the way they want it. Increasingly, the internet is a major part of the equation. Don't know how to get started? Here are 10 tips according to Richard D. Harroch author of "The Small Business Kit for Dummies"

1. Obtain a good domain name