The Christmas battle for the consumer purse has been clearly won by the online retailers. Just like the record charts and the converted ‘Christmas number one’ the battle to win the consumer spend is now becoming an annual ritual. But just as the singles charts have flipped to accommodate all downloads, the emphasis on the actual spend is not as important as the trend to online. What we are focusing on is zero and or declining sales versus clear growth.
IMRG (Interactive Media in Retail Group) reported that Internet sales peaked for the first time during the start of seasonal discounting last week after surging more than 50 percent in the run up to Christmas, whilst Footfall announced that store visits to the High Street were down 6.8 percent in the week after Christmas.
IMGR believe 25 million people now shop on the Internet and that online Christmas sales are looking to be around half a billion pounds better than already strong industry forecasts, and will top £7.5 billion in the 10 weeks leading up to the holiday. They also stated that unlike in previous years, there was no sign of a post-Christmas fall in online demand. Tesco, the world's fifth largest retailer, which forecast a 'good Christmas,' saw visitors to Tesco.com swell to 1.3 million over the holiday period.
Among those retailers hardest hit are the entertainment retailers who are suffering from a boom in downloads and phenomenal uptake of broadband connectivity. Hitwise stated that music downloads have risen 50% this year. Woolworths and HMV issued profit warnings before Christmas while Music Zone, filed for administration on Wednesday.
So what does this mean for the booktrade?
Amazon clearly is the brand and has the major share of the market. It will be very interesting to see how the new Waterstones web site has faired. Perhaps more interesting is the battle between the publisher direct internet sales versus the smaller independents.
We clearly have more interested parties selling books on the internet than on the High Street, but we must not loose sight that the retail sales will continue to be the dominant sales channel for many years. Growth in digital downloads of ebooks and or abooks is inevitable but will be slow. However we must recognize that even if these were to grow to say 10% of the market over the next 5 years we must then add to them the physical books that will be sold online and expect at least 35% of the market to be online in one shape or another.
The question is whether we are prepared for such a shift and understand its potential impact?