Article Originally published in the Capital Region Business Journal - October 2008 - (note that the September 2008 - December 2008 issues of CRBJ were not posted online - this link will take you to their main page)
Title: Rising Gas Prices Boost Online Shopping
By: Jonny Buroker
ONLINE SHOPPING PROVIDES A GREAT GAS SAVING OPPORTUNITY
Is your company prepared for the latest e-commerce trend? The quick rise in gas prices has reduced the number of casual trips that shoppers are taking just to “window shop” for the goods and services they are interested in. Instead, consumers are doing their window shopping online, now more than ever.
With many brick-and-mortar companies struggling, 11% of US consumers surveyed by Nielsen in June 2008 said they were shopping more on the Web as a result of gas prices.
"E-commerce is a bright spot," said Jeffrey Grau, senior analyst at eMarketer. "While retail store growth is in the middle-low single digits, e-commerce is still growing at least in the mid to high teens.
In a July 2008 New York Times article, Mike Boylson, CMO of JCPenney, said "with gas being such an issue, we know that mall traffic is down more than off-mall traffic". Mr. Boylson said J.C. Penney had an 8.7% increase in Internet sales in Q1 2008, compared with a 7.4% decrease in sales at stores open at least one year.
The Times also reported that Gap had an 11% decline in same-store sales in Q1 2008, but a 21% increase in online sales.
Gas prices have been having an effect on consumer behavior for a while. Some 13% of adult consumers in the US surveyed in January by Vertis Communications said they were buying more online.
In an April 2008 Piper Jaffray study over one-half of respondents selected rising gas prices as an incentive to increase online buying, while slightly less than one-half (48%) cited lower prices as a reason for making online purchases. Another April survey by iCongo revealed that high gasoline prices were an incentive for 33% of shoppers to purchase more online.
So, what do these changes in consumer behavior mean for your business? Look over this list of questions and if you answer “no” to any of them it’s time to look at your Internet Marketing Strategy and consider making some changes:
- Do you have a professional web presence?
- Does your web site rank high in the search engines for the keywords your potential customers are searching for?
- Are you building traffic to your site via pay-per-click marketing, online press releases and other means?
- Can potential customers review your products and services via your site, even if they can’t purchase them online?
- If they can purchase online, do you provide multiple payment options?
- Do you provide product reviews and customer testimonials?
- Are you capturing the contact details for your online visitors and communicating with them throughout the year via online newsletters, promotional announcements, and surveys?
- Are you getting analytics about your web site visitors and using that information to make changes to your site?
To the extent that you can enhance your online presence and provide opportunities for your current and potential customers to find you online and allow them to search through your products and services, you not only build brand loyalty, you also keep a few more dollars in their pockets.