The IMRG Senate Christmas statement makes great reading. Here it is in full:

Christmas is coming and it is going to be bigger than ever this year online with over £13.8 billion to be spent by the UK’s 27 million e-shoppers during the festive season, according to Forrester Research*, which compared to IMRG’s 2006 data is up 42% on last Christmas.

So what is contributing to this huge uplift in spend online? Shoppers are migrating online to find more choice, convenience and better prices. But more than that, the internet is all about independence, immediacy, modernity, attitude; it’s where many people now feel most comfortable. Some 61% of UK homes are now connected to the internet, 15.2 million households, according to National Statistics, and with 84% of online households in the UK using a broadband connection, shopping online has never been quicker and easier. And as well as sales going up, consumers’ confidence in shopping online is also rising.

According to the latest IMRG Customer Service Index by eDigitalResearch and ipoints, confidence in web site security rose two percentage points in the past quarter to 75.6%. Commenting on this Gerald Kitchen, CEO of SecureTrading said that “growth is set to continue as consumers become more comfortable with the security aspects of trading and purchasing online. It was not long ago that consumers were uncomfortable with even purchasing low ticket value items like a CD. Today, we are seeing consumers purchasing items costing thousands of pounds”. The IMRG Customer Service Index also revealed that customer delivery satisfaction had risen to 80.2%.

The demographic profile of the web is changing from the young male dominated scenario of recent years and this is feeding into the sales growth online.

Women aged 18-34 are now accounting for 21% of all time spent on computers in the UK, which equates to 13 minutes out of every hour online, according to Nielsen/Netratings. And there are twice as many women aged 18-34 active online as there are girls under 18 or women over 50. Over 50% of women under 25 now buy clothes online every month.

At the older end of the age spectrum around 30% of total time spent online in the UK is accounted for by the over 50s, with the number of broadband users aged over 55 growing at nearly twice the overall adoption rate among European internet users, according to the European Interactive Advertising Association. Also in the UK internet users aged 55+, the ‘silver surfers’, are the 2nd largest demographic group online, according to Hitwise. The UK internet population is now split almost equally between males (51.5%) and females (48.5%), according to the latest Nielsen/Netratings.

Reflecting this change in profile of online shoppers, retailers are seeing buying patterns altering on their sites and in some cases are opening new departments and product areas to capitalise on these new customers, especially in the run up to Christmas.

Commenting on how sales patterns are reflecting the change in online user demographics, Ulric Jérome, Managing Director of IMRG Member Pixmania says: “We have seen sales growth among the older generation of ‘silver surfers’ and women. They now see the value of technology and have more disposable income than previous generations, meaning technology products are becoming a part of the DNA of their lifestyle. They now embrace technology and understand the ease-of-use and convenience of online shopping better than ever.”

Another IMRG Member, Amazon, have launched four new stores on their UK platform this year and look to capitalise with a broad product range offering in the run-up to Christmas. Brian McBride, Managing Director for Amazon.co.uk said: “2007 has been a great year for Amazon.co.uk. Not only have we seen the launch of four new stores – Sports & Leisure, Jewellery & Watches, Shoes and Baby – but we have seen record breaking sales for the likes of ‘Harry Potter and the Deathly Hallows’ and ‘The Exclusive Catherine Tate Comic Relief Special’ DVD. The proliferation of broadband in UK homes is certainly allowing a greater proportion of the UK public the opportunity to shop online. This means that every age group, across both sexes, is now well represented in the share of internet retailing spend. Whilst there are certain areas that have seen accelerated growth, like the so-called ‘Silver Surfers’, there will be a continued strong increase in internet retail spend across all groups of the UK adult population for a good time to come. This promises to be our biggest Christmas on record and we look forward to serving millions of customers with an incredible product selection, at customary low prices and with a delivery option to suit every shopper.”

The strength of the female purchasing power is no better illustrated than at Play.com, where their influence is being felt in the all-important top selling albums for Christmas. Commenting on this Stuart Rowe, spokesperson for Play.com said: “What is going to be number one selling album at Christmas is the burning question on everyone’s lips. It’s looking set to be the battle of the divas, with Play.com already receiving massive pre-orders on Leona Lewis, Kylie Minogue, Celine Dion and the Spice Girls. However when it comes to gifting, anything goes. The Now That’s What I Call Music series always does well with the general public, and Live Lounge 2 and Radio 1 Established 1967 are already proving very popular choices with our customers. If we had to suggest what will be the biggest seller on the site as a gift purchase, we think it’ll be a 3 way fight between Kylie, Leona and Westlife, who should never be underestimated in the Christmas market – last year they took on both Oasis and the Beatles and won. Music is a great gifting option at Christmas. It is affordable, accessible and instantly rewarding.”

Are Christmas sales online heading for another record amount? With more people online, greater choice and availability and even more parcels being delivered than ever before it certainly looks that way. Jonathan Wall, Marketing Manager at dabs.com, observed: “Shoppers continue to use the internet as an easy way to seek out best value, especially at Christmas time when budgets can be tight. Retailers such as dabs.com have used the flexibility of their online store to create special “bundle deals” which offer extra discount and help stretch the festive budget even further.” Val Walker, Royal Mail’s Head of Multi-channel Retail Marketing, said: “Royal Mail is geared up to deliver a record breaking online Christmas and expects to handle more than 100 million gifts and presents ordered on the internet during the festive period. Royal Mail has responded to the needs of the online shopping community, both shoppers and retailers, with the introduction of a new service which improves the delivery experience. ‘Royal Mail Tracked’ enables retailers to provide their customers with a tracking number when the goods ordered are dispatched so that they can track the progress of their delivery themselves. The service also enables retailers to give their consumers the opportunity to specify an alternative delivery point, such as a porch, shed or a neighbour, should they not be at home to receive the item. This new service builds on the success of Royal Mail’s Local Collect service which enables online shoppers, who are not at home to take delivery of an item that cannot be posted through the letterbox, the opportunity to ask for it to be taken to a Post Office branch near their home or work.”

Jo Evans, IMRG’s Managing Director commented: Like a lot of people, I have already begun my Christmas shopping without having to battle with traffic and crowds, by buying online. I have thousands of shops available to me, and if they are displaying the ISIS / IDIS logos, I know they are trustworthy and reliable, and I can shop safely and securely receiving my purchases at home in good time for giving to my family and friends.”

Footnote: * Source: “Europe’s 2007 Christmas: An Online Retail Wonderland”, Forrester Research, October 2007.

Salmon customer Argos has launched an online viral campaign.

Although we can’t say we were involved (because we weren’t) Argos is promoting its latest catalogue with a campaign dominated by a giant sweet jar standing over 2 metres tall.

The campaign, which runs until Christmas, will highlight Argos’ range of 18,000 products and drive awareness of argos.co.uk (which we are very much involved in) during the festive period.

Launched today, an interactive 3D giant jar and the film showing the filling of the giant jar can both be found at giantjar.co.uk. Once on the website, users are encouraged to guess the number of Argos products held within the jar. The person with the closest guess, which will be drawn on 20th December, will win all the items in the jar (or £10,000).

Some facts I recently picked up at the IMRG members meeting. Breathtaking stuff.

• 85 Million parcels presently being delivered to UK homes per month

• Number of UK households online has increased to 61% (15.2M) 84% of these have broadband (29/08/2007)

• 18% of Brits buy groceries online (09/08/2007)

• Tesco online sales reach £1.2 billion (17/04/2007)

• Online adspend overtakes newspapers (28/03/2007)

• 16% of worldwide population online (23/07/2007)

• Young women dominate UK internet (17/05/2007)

• TK Maxx confirms theft of 45 million bank card details (30/03/2007)

This article from the BBC business website (“Mail order looks beyond the printed page”) is also a great read.

I saw this video on Youtube. It’s by IBM, promoting their Commerce platform. Worth a watch.

Online retailers are upping their game as shoppers become increasingly savvy and demanding about their internet shopping experience.

Companies are making improvements to give customers a positive and more sophisticated online experience, according to a study of 150 retailers by Forrester Research and online retail network Shop.org.

It found that over the next year, internet retailers are focusing on site design and performance, improving the efficiency of online marketing and improving cross-channel integration.

Executive director of Shop.org, Scott Silverman said companies are investing in new features to keep customers coming back with homepages everywhere getting major facelifts.

The vast majority of companies surveyed (88 per cent) said improving product detail pages will be a priority for the next year with better integrated customer ratings and reviews, images and photography.

On their homepages companies will focus on top sellers, ‘what’s new’ sections and introduce more drop-down menus and roll-over lists in navigation areas.

Companies also aim to improve customer service, with 33 per cent planning to invest in live chat tools and 53 per cent looking to improve customer check-out facilities.

Forrester analyst Sucharita Mulpuru said it is encouraging so many companies are planning to integrate customer feedback as it will boost their ability to improve their service.

The survey also found email marketing is seen as the most effective tool for customer retention, with 51 per cent of retailers saying emails sent to customers about new products are very effective.

But many respondents feel web 2.0 and social networking tools are relatively unproven as they are still in their infancy as marketing tools.

<From silicon.com>

How time flies and how stupid of me not to mention that Salmon recently won a significant ‘Application Management and Support‘ contract with ICI Paints. 

We were awarded a further two year Application Management and Support contract extension – to support, maintain and tactically develop ICI Paints 27 European consumer facing websites.  The brands that the contract covers include Dulux, ICI Paints, Julien Peintures, Dulux Decorator Centre, Hammerite and Cuprinol.

We have developed a close working partnership with ICI since 2003 – as their European Regional Systems Integrator – helping to develop the Internet as a consumer marketing and service channel.

This deal centres on Salmon helping ICI Paints ensure their branded websites reflect their leadership position, as well as providing customers with the optimum online service.  Under the terms of the new contract, Salmon continue to be responsible for the day-to-day operation of the 27 websites, providing a portfolio of services to ensure they remain operational and performant.  Additionally Salmon are responsible for ongoing development work and operational support and management of ICI Paints European Internet platform.

At a time when web 2.0, and front-end enhancements take centre stage, it is important to remember that it is essential that eCommerce websites are robust, scalable and intuitive in order to meet spikes due to seasonal demand and TV advertising campaigns.

By outsourcing Application Management and Support tasks to Salmon, ICI have been able to focus their attention in the core areas of their business – leaving code installation, configuration, Apache Lucene, J2EE, Java and Java Script, EJB, JSP, HTML, XML, IBM WebSphere Commerce, IBM WebSphere Application Server, Database Administration and SUSE Linux to the experts!

A seven year long research project revealed recently by online market researcher eDigitalResearch has shown a steady rise in multi-channel retailers’ ability to challenge the dominance of pure play retailers.

Play.com, Figleaves and Amazon have consistently scored highly overall, often topping the tables in a variety of performance categories, but multi-channel retailers have gradually worked their way back into contention and are now challenging for the top spot.

The research is echoed by IMRG who last month ranked Salmon’s customer Argos, the 2nd most popular online retailer in the UK in their Hitwise Hot Shops List – which ranks the top 50 UK e-retailers by number of visits.

The Retail Bulletin adds; “There has been a general improvement in technology over the last seven years, assisted by the increase of reliable broadband connections, which has raised the standard of online retailing. As a result the common problem of critical pages such as checkout and payment confirmation not loading correctly has gradually been ironed out and encouraged more confidence from users.

New online investments have consistently been seen throughout the seven years, including improved search engines, improved product presentations and security, have shown themselves to be crucial to maintaining market position. Generally, an overall increase in site development investment has mirrored the consumer shift in spending patterns.”

On this blog we have discussed online purchases and online transaction handling before – usually in the context of usability or path to purchase. More often than not, we’ve ended up drawing comparisons to, or extolling the virtues of a sophisticated offline business process and asking the question, “Physical stores don’t work in this manner, so why are you making your online store work this way?” Ever heard the phrase ‘technology for technologies sake?’ We have, and it’s not pretty.

And yet, every so often the opposite happens. The online paradigm shifts an offline business process profoundly and sharply.

One such occurrence is related to purchasing. To me it seems that as eCommerce has become more mainstream, ‘ease in purchasing’ has become a pre-requisite for shopping generally.

One approach to defuse poor ease in purchasing offline is off course to invest in customer service representatives to smooth away any ill feeling. But another way is to invest in technology and its integration.

And so it transpires that earlier this month more than 1,000 London retail outlets including those at ‘Threshers’ and food chains ‘Yo Sushi!’ and ‘Eat’ have all signed up for a “contactless” payment facility. If ‘ease’ and ‘trust’ could be encapsulated “contactless” payment is it.

The so-called “tap and pay” system (like Transport for London’s Oyster payment network), is being launched in the autumn and other retailers are already on board too – ‘Krispy Kreme’, ‘Coffee Republic’, ‘Books Etc’ and the ‘Science Museum’.

Adding to the momentum, payment providers Mastercard and Visa have announced plans to offer contactless cards, which allow transactions of up to £10 without the need to sign or enter a pin number via their member banks. (The system, which is already popular in the US through outlets including fast food chain McDonald’s, aims to speed up payments and reduce queues.)

It is certain is that we can expect a great amount of marketing noise (good and bad) to emerge through 2008 as cashless payments start to become a reality.  ‘Ease’ and ‘Trust’ are key – and these are tricky subjects. But what price contactless cards will become a de-facto standard payment method offline?  My bet this is not a trend. This is going to grow like wildfire. First stop £10, next stop £25.  Soon.

Suddenly strategic plays involving loyalty cards and their underlying information seem very interesting indeed. And how will the mobile operators respond? They have also long been touted as the payment mechanism de-rigour.

Who can tell which way payment will shift? The only certainty is that as retailers use technology to make even more money – they’ll end up handling less of the dirty cash itself.

When speaking to friends who work in different sectors recently, it became apparent that their view of eCommerce and the on-line world is pretty shallow.

They see web sites as basically nothing more than a bunch of pretty pictures, designed, developed and operated by a troupe of digital interactive artists, shuffling about in un-ironed clothes with hair pointing in all directions and an iPod blocking any attempt at conversation.

Frankly I was a bit offended.

Design skills are necessary for sure, but if I were looking for a partner to help design, build and support an eCommerce site, I’d want someone with experience of running large-scale sites taking over £1M each day, an understanding of enterprise systems integration issues (SOA), solid commercial skills and a good grasp of the sector I’m operating in.

Where your average accounting, payroll or CRM system is concerned, change is often considered a bad thing. In strategic terms these are ‘operational’ systems where change is minimised wherever possible to reduce risk and keep a lid on costs. The life expectancy of such a system is often around the 8 to 12 year mark – although we know that some will become entrenched and live for 20 years or more as successive IT managers on 4 year job-change cycles duck the issue of replacing them for fear they’ll lose their job, reputation and future if it all goes a bit pear shaped on their watch.

But web sites are a bit different. To remain competitive they acquire new features on a frequent basis and are more akin to living breathing things in that they evolve in response to market developments. For websites, change is constant and there isn’t the luxury of a fixed quarterly or even biannual release cycle favoured by centralised IT departments. The outcome is that large scale eCommerce sites have a complex code base with multiple code streams requiring outstanding configuration management skills.

The systems infrastructure is intricate too. Managing peak load intra day and shifting demand throughout the year isn’t a trivial task. Frequently a dozen or more application servers will be required. And web servers, database servers, firewalls, routers, load balancers, etc. And they all need configuring and monitoring to make sure the site is up and stays up because – in financial terms – a site outage may be equivalent to shutting the doors on ten or more physical outlets. Now that’s the kind of thing that gets the CEO’s attention!

Integration wise, whether an eCommerce site is small or large there is a significant amount of ‘plumbing’ required to integrate with back-end systems and third parties. Data about products, pricing, offers, discounts and stock positions has to be sourced from somewhere. Orders need to be sent to fulfilment systems. Then we have to consider fraud detection, payment gateway integration (not forgetting 3D secure), image hosting, address verification, and mapping services too. We shouldn’t forget the bunch of data feeds required for affiliates and price comparison sites either. Or email and SMS communications.

I could go on with Web 2.0, social shopping, product reviews, RSS feeds, blogs, Google checkout, etc. but you’ve got the idea now, right? All of this integration work requires traditional Systems Analysis skills as well a detailed understanding of contemporary IT architectures and approaches such as Service Orientation. Experience suggests the more third party integration is required on a project, the more risky it is because of the dependencies involved. I’d want people that have done this before, lots of times and in the large.

In addition to the technical, there is also much to be gained from a partner that understands the business sector too. Any hard-fought for trust engendered by your website will either be reinforced or smashed to bits when the delivery promise made on the website is kept or not by the fulfilment operation that follows, so an understanding of the reality of the distribution centre and store environments is key to providing realistic information to on-line customers. A second site with separate branding probably means different packaging to be used in the DC. Is there physically room for another bench? How will the packers know which brand the order relates to? And let’s face it, Retail is a seasonal business and if you’re not ready for the Xmas peak, January is a lousy time to be looking for alternative employment as nobody has budget until April.

So sure, design and designers are important; an understanding of the psychology of the purchasing process and translation of that into slick browse and checkout processes will undoubtedly do wonderful things to conversion rates. But all in all eCommerce is a whole lot more complicated than pretty pictures.

I just wish my friends could see the big picture.

The exceptionally wet July weather led to a jump in internet shopping, with online retailers reporting an 80 per cent year-on-year increase in sales last month.

Shoppers spent more than £4.2bn on online shopping in July, a record monthly figure, according to the Interactive Media in Retail Group, which tracks sales by e-tailers.