Public Sector reforms will impact on retail spend this Christmas

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More than a third of people surveyed intend to reduce their spend this Christmas.with 65% of people planning to start their shopping early in order to spread the cost in the wake of the Government's spending cuts.

However, while the impact may be felt on the high street, online retail sales could provide a vital uplift, with 28% of people expected to do more shopping online this Christmas than they did last year.

Competitive pricing, more extensive product ranges and the sheer convenience factor are driving more people online this year, with 61% planning to do 50% or more of their shopping online. Internet sales are also widely expected to be buoyed by mobile shopping, as 18% of consumers plan to do some of their Christmas shopping using their smart phones, a clear indication that retailers need to integrate the mobile channel within their Christmas marketing strategies.

Increased consumer confidence in delivery and the customer service contact function are fuelling online growth, with overall customer satisfaction in online shopping increasing since July. Better security measures are also contributing to rising confidence, as 80% of people have now signed up to 'Verified by Visa and Mastercard', which greatly increase the trust consumers can have in online shopping. Despite these enhanced security measures, people are still more likely to shop with trusted brands, with 43% stating that Amazon is their favourite store for Christmas shopping.

Chris Russell, Director of eDigitalResearch comments: "Reduced personal budgets this Christmas will mean people are more conscious of where and how they spend their money. While they may initially gravitate towards well-established, trusted brands online, what consumers really want is a seamless experience from the home page to the checkout and the reassurance of after-sales care.

"It is encouraging that overall satisfaction in online shopping has grown in the last three months and that Internet sales are expected to boost retail profits this Christmas. However, this does put online retailers under pressure to perform and meet growing consumer expectations. Savvy retailers will be able to personalise the shopping experience, targeting offers and discounts to loyal shoppers through their preferred medium of contact, while encouraging new shoppers through a well-integrated and interactive website."

David Smith, Managing Director of IMRG, adds: "With uncertain job security and rising personal debt as a result of spending reforms and the VAT increase, consumers are looking to stretch their pounds further this Christmas. The survey indicates that while price is the most influential factor in consumer purchasing decisions, it is speed and convenience that will drive consumers online. It is therefore imperative for retailers to ensure that the online experience is hassle-free."

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