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Oct 14, 2020
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UK e-tailers fear inability to cope with Xmas demand - report

Oct 14, 2020

A worrying new report has suggested that as many as 21% of online retailers in the UK fear for their futures unless they have a successful festive season.

The Christmas shopping season may be challenging for online reatilers

The pressure to generate strong Christmas sales is always heavy and a number of retailers tend to fail post-Christmas. But with online retail having been the strongest segment in the UK this year, it's a particular concern that even online specialists are this worried.

The figure is based on a study from online payment company Checkout.com that commissioned Opinium to speak to 256 B2C retailers with an online presence.

And while fear of a weak Christmas period is strong, the reasons vary and it’s not always because e-tailers think consumers won’t want to buy. Opinions seem to be divided among e-tailers about whether consumers will be in a spending frame of mind and this makes planning difficult.

Yes, as many as 26% of online retailers expect to take less revenue than last year during this Black Friday, for instance. But 14% of shoppers intend to spend £500 or more over the festive period. 

Meanwhile, the biggest problem some retailers see isn’t consumers cutting back but e-tailers not being able to cope with demand. Some 19% of the online merchants said they don’t think their e-commerce offering can cope with this year’s online festive sales rush. That rises to 22% for smaller retailers.

These fears come as e-tailers are faced with a potential bigger-than-usual shift online on the part of consumers. The problem is that this comes in a year in which businesses’ money has been tight and operational flexibility has been hampered by lockdown rules.

As much as £10.5 billion is estimated to be spent over the festive period, with the average person expecting to spend £278 on the digital high street this Christmas and Black Friday. Fashion is among the items predicted to be purchased online the most.

It all suggests a situation in which consumers will be going online with certain expectations that won’t be met by e-tailers. For instance, 9% of consumers intend to pay using a mobile wallet like Apple Pay when making an online purchase during the festive sales period. But 40% of online retailers say the payment infrastructure they have in place doesn’t let them accept such payment methods.

Checkout’s chief commercial officer Bradley Riss said: “The upcoming Christmas period, which looks set to be the 'most online’ quarter ever, will be the real test on the digital high street. Convenience is king and that’s as true of payment systems as it is online deliveries. It’s a busy time of year for consumers, and they won’t wait for archaic e-commerce infrastructure or limited payment choices when a competitor is only a few clicks away.”

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