How the e-tailers stole Christmas

You're either one of those people that finishes their Christmas shopping in late October or, like 95 per cent of the population, you leave it until the very last minute to push your way wide-eyed and crazed through throngs of similarly desperate shoppers.

Either way, the gasps of joy or sighs of disappointment heard on Christmas mornings when your presents are unwrapped will be down to your choices alone.

But as stressful as the whole process is, can you imagine being responsible for thousands of Christmas gifts? No? well welcome to the e-tailer's nightmare.

Like shoppers fighting over the last turkey in the supermarket, e-tailers have been driven to employ desperate measures to catch and keep customers.

A recent study by Cyveillance found that more than 20 per cent of Europe's top domains use spawning techniques (pop-ups) or mouse-trapping tactics to keep visitors on their sites.

Of course site navigation is an essential component in moving the customer around and letting them get at your wares. But at Christmas time, it pays to be more proactive, which is where gift guides can be a godsend.

Frankly if you're still struggling for ideas for gifts by mid-to-late December the notion of "it's the thought that counts" just has to take a backseat. That's why, for some slack shoppers, gift guides are quite clearly the future of present-buying.

And this is where Amazon comes into its own. Its gift guide is a festively-decorated version of its tried-and-tested search engine used to generate reviews and gift ideas the rest of the year.

So for some the chore isn't going to be quite as painful as usual.

As for whether consumers are going to get a good deal - well, they probably are, but that's not the most important factor in going online. According to Goldfish credit card, shoppers are gearing themselves up to spend six times as much on gifts online than last year - that's a whopping £2bn - and furthermore price doesn't really matter.

David Cooper, business development director at Goldfish, says: "Consumers are starting to grasp the convenience issue and aren't overly concerned about price."

It therefore follows that the key factor in determining success must be service. The product range - and critically its availability - must match customer expectations.

He adds: "Customers don't expect overnight deliveries, especially at this time of year. But they do need to know when their goods are expected to arrive. E-tailers need to get it right at Christmas to encourage repeat purchases in the new year."

Patricia Luer, analyst at Jupiter Research, explains that the biggest issue for e-tailers is being up-front about what they can really deliver on. "They can't be honest with customers with regards to deliveries because they're trying to be aggressive. However, they have to realise that they might not be able to control everything in the logistical chain."

But Cooper adds that e-tailers still have the chance to "get smarter within the next seven days". Using, for example, carefully targeted email marketing campaigns that can be adapted to match changing product availability and other special offers.

For wellbeing.com, the online arm of Boots the chemist, this is Christmas number one. Last year it was calling itself boots.co.uk, had a limited product range and wasn't particularly well-integrated with the high-street stores.

The new site was launched in March and very soon after that the company started planning for Christmas. The key preparation has been tying the online and offline operations together. One idea is to ensure the in-store offers, such as the famous three for two promotions, are also supported online.

Peter Dingle, director of customer offers at wellbeing.com, says: "There are quite a number of e-tailers with a high-street presence that are a year behind us." He cites superdrug.com, which has closed its ecommerce operations.

For wellbeing.com, Christmas begins at the beginning of November. The site has made preparations for increased traffic through infrastructure investments over the last 12 months. And the preparations appears to be paying-off.

Dingle claims there has been a seven-fold increase in the last week of November on typical order rates. This is in part down to in-store promotion of the site

As for the rest of the e-tail market, he says: "Any serious player will have applied the same level of planning and investment as us."

At the UK operations of bol.com, preparation for Christmas started four months ago and really kicked in about two months after that.

Last year bol.com did lots of offline branding work. This year, partly because marketing budgets aren't the size they once were, the focus has been on banner ads. There have also been new server upgrades to handle increased traffic.

Tony Prescott, managing director of bol.com UK, told silicon.com: "We're focusing on the people we have - it's all about retaining customers." Last Christmas, sales were double those of 1999. This year special mini-sites have been constructed to take advantage of current popular products such as the ubiquitous Harry Potter and Lord of the Rings.

Prescott pledges: "The availability of products is good and fulfilment will be good. Our customer service centre has been expanded to cope with any problems."

But you don't have to look far to come across the warning signs already. Last week jungle.com cancelled 2,500 Christmas orders because it didn't think it would be able to deliver them in time.

Andy Singleton, marketing director of Jungle, last week defended the move. "I think this is a sign that e-tailers are growing up. Whereas before they would hang on to orders at any cost, we're now acknowledging that we can't be sure of delivering these products on time and giving them the chance to order different products or go elsewhere," he said.

While the number of online shoppers is up, the number of e-tailers is down. Take high-street favourite Waterstone's - it's given up the ghost and is now working with Amazon.

E-tailers are dependent on third party logistics outfits to fulfil orders and if they cock-up then the problem is beyond the control of the e-tailer. What the e-tailers can do is come clean with customers and be transparent about delivery times. After all, honesty is always the best policy.

Over-promising is one of the key mistakes made. The information on the site has to be current and availability of goods must tally with inventory information.

Bol.com's Prescott sends out a stark warning to his peers: "It's too late now. Christmas started two months ago. If any e-tailer is still in planning stages now, they'll be out of business by January."

But it's not too late to get out there, join the marauding hoards on the high street and do some serious buying. Better still, stay at home and do it online.

Merry Christmas.