January 31, 2008

How important were final Christmas order and delivery dates?

One of the biggest challenges that online retailers face is delivering goods, particularly during the busy Christmas period. Many consumers (myself included) have had their fingers burnt when ordering online, only to find that presents for loved ones turn up after the event. As the chart below illustrates, the number of search terms containing the word ‘delivery’ increases in the run up to Christmas, this year peaking on the week ending 22 December. For these last 4 weeks before Christmas, a third of people searching for ‘delivery’ went to eBay UK, the largest online retailer in the UK. Indeed, the auction site received traffic from no fewer than 348 separate search terms containing the word ‘delivery’ during those 4 weeks.

Online retailers respond to this concern in two main ways. Firstly, they make sure to communicate final delivery dates in order to avoid disappointing and upsetting their customers. Second, they try to push their final order dates as close as possible to the big day, so as to cash in on any last minute shoppers.

This year a lot of retailers were taking orders up until the 21st or 22nd, which made us think of an interesting bit of analysis. Does a later delivery date help boost traffic to a website in the last week before Christmas? In order to answer this question we recorded the last delivery dates of 50 top online retailers in the UK (as published on their websites), and plotted this against the retailers’ busiest day during the last couple of weeks before Christmas. The results are illustrated on the chart below: the x axis shows the stores’ last delivery dates; the y axis their busiest day; and each of the dots represents a retailer.

Now, there isn’t a clear correlation here, but I think that there may be something in the hypothesis. The grouping along the bottom of chart is no surprise – those were the peak days overall for pre-Christmas online shopping in the UK, so you would expect a lot retailers to have their busiest day then. Excluding that bottom row, however, I would claim that the grouping circled in turquoise does indeed show that the closer your final shipping day is to Christmas, the more likely you are experience a traffic peak closer to the big day.

One final interesting finding: the orange dots represent the websites of high street retailers (e.g. Tesco, Argos, Next, etc.), while the blue dots are pure-play online retailers (e.g. Amazon, Play.com, Asos, etc.). I was expecting there to be more of correlation with the online only retailers, but in fact the opposite is true: most of the online retailers experienced their busiest day early on. One explanation for this may be trust. Consumers know that if they miss the last order date for an online retailer they are at the mercy of the postal system, so are therefore a little over-cautious.

This points to a possible explanation for the greater correlation of the orange dots: consumers feel that they can order with high street retailers at the last minute, because they can always pop into the shop if things go wrong. Of course, these dots only represent internet visits, not transactions, so another explanation is that these people are browsing online before going into the store to purchase. Certainly, this would explain the orange dot in the top left corner. That retailer saw its traffic peak on December 22, 6 days after its final order date of 18 December! A final explanation is that these people were looking in advance for sales bargains – Boxing Day was the busiest day for online retailers in 2007, and the high street stores benefited from that surge in traffic more than their pure-play online competitors.

This will be the last Christmas shopping post (I promise), but for those of you that are still interested, we have just published a report containing our post 2007 Christmas shopping analysis. You can download it here. Roll on Easter…

Posted by Robin Goad at 10:00 AM
Posted to Christmas | Retail | Search | Shopping and Classifieds

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One of the biggest challenges that online retailers face is delivering goods, particularly during the busy Christmas period. Many consumers (myself included) have had their fingers burnt when ordering online, only to find that presents for loved ones t... [Read More]

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Posted by: Scott Zakrajsek at January 31, 2008 03:55 PM

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