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Christmas bonanza drying up for UK web retailers

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Although UK Web retailers enjoying record breaking sales over Christmas and in the January sales, many are losing out on potentially millions of pounds of further business because of failure to turn the festive shoppers into regular customers.

Failure to buikld relationships with these new customers will be the big "missed opportunity" for online retailers in 2004, claims Microsoft's small business team.

A survey of 2,000 UK consumers reveals that more than a fifth shopped at online stores which they had not previously used over Christmas and the New Year. When asked what would drive them back to those stores most said "the personal touch" was the main driver. Almost 60 per cent put good old fashioned service at the top of their list of criteria for choosing where they shop.

"Consumers are tired of being continuously pestered to buy more, even if the products are vaguely relevant to them", said John Coulthard, head of Small Business at Microsoft. "With the run-up to Christmas and the January sales, retailers and especially local small businesses, have had a great opportunity to attract new customers. Now they have the opportunity to build an ongoing relationship with them based on understanding their likes, dislikes and what they may be interested in purchasing in the future."

According to Microsoft's consumer poll, small local businesses that are able to offer more personal service are able to outperform their larger rivals. The study found that five per cent of consumers would be prepared to give out personal details about their purchasing habits to a local store, but would not to a larger business.

Almost a third of consumers said they were happy to divulge their details and so provide firms with information that they can use for ongoing marketing and relationship building - such as sending birthday cards.

More than 70 per cent of individuals who responded to the survey said they were likely to return to a store if they received regular updates of special offers. The poll also found, unsurprisingly, that most consumers have had enough of the impersonal mass-mailings. They place good service alongside price as their main reasons to purchase.

Coulthard said: "For most of us it is actually the little things that count - we want to feel that people have thought about if something is relevant or helpful to us and targeted on that basis. The businesses that take up this challenge will be the ones that win the business." ®

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