January 11, 2007

M&S, HMV.co.uk and Woolworths Big Winners at Christmas (Along with Y! and Google) - Review of Predictions

In September, we issued predictions for Christmas retailing. I'll review those predictions here and let you know what really happened.

Prediction: Share of category visits will rise 8% year on year

We over-estimated the growth slightly. In December 2006, visits to the Hitwise Retail Index (an index of 100 leading retail websites) were up 5% year-on-year. In calculating the estimated growth I used figures back two years. I likely didn't take the Robbie Williams and Take That factors sufficiently into account. Both announced tours last year that caused a major surge in visits to retail ticketing sites in December 2005, thereby throwing off the year on year growth trend.

Prediction: Search Engines will Account for 35% of upstream visits to retail websites

In December 2006, search engines accounted for 36% of upstream visits to retail websites, representing a 20% increase year on year (!). We predicted that this growth would be led by Google and Yahoo! Search and indeed, Google (combined UK and dot com properties) accounted for 28% of upstream visits to retail websites in December, up 28% year on year and Yahoo! Search (combined UK and dot com properties) accounted for 2.4% of upstream visits, up 60% year on year. Both search engines sent 1 in 5 of their own visits to a retail website in December.

Prediction: High Street retailers will continue to make gains against pure-play providers

High street retailers were among the biggest gainers this Christmas, experiencing some of the largest increases in market share of UK internet visits among the top 100 retailers. In particular, market share of UK internet visits increased year on year in December by:
+ 25% for Marks and Spencer
+ 26% for Woolworths
+ 58% for HMV.co.uk
+ 23% for John Lewis
+ 107% for Waitrose

This week, Stuart Rose used the “R word” (recovery) for the first time to describe Marks & Spencer's performance. E-consultancy has a nice run-down on retail sales figures for Christmas and notes that M&S saw a 70% increase in online trading. The FT (requires subscription) reported the same figure, but I am not sure of the period. E-Consultancy also reports that John Lewis online trading was up 60% year on year.

Prediction: More last minute shopping

We predicted that whilst visits to retail websites would again peak in the second week of December (week to 9th December 2006), the peak would straddle the second and third weeks, as opposed to the first and second weeks as they had in 2005. Visits did peak in the week to 9th December 2006 and whilst they declined slightly the following week, remained stronger than they had in 2005, reflecting the trend to more last minute shopping. The following chart illustrates nicely this trend of last minute shopping.

Posted by Heather Hopkins at 12:00 PM
Posted to Shopping and Classifieds

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