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Hitwise Intelligence - Robin Goad - UK

Analyst Weblog

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Has the threat of postal strikes harmed eCommerce in the UK?

October 21, 2009

The threat of further postal strikes is one of the hottest political issues of the moment, and this is being reflected in our search data. As the chart below illustrates, searches for a portfolio postal strike related terms were up 93% last week, and have increased by 144% over the last month.

Understandably - given the potential impact any strikes would have on its business - the Royal Mail is currently bidding on a lot of strike related terms, and ‘postal strike’ was the eight biggest search term sending traffic to its homepage last week. As the chart below illustrates, the postal service picked up just over a quarter (26.3%) of search traffic from our portfolio, but paid for over three quarters (77.9%) of those clicks. Much of the rest of the traffic is going to news sites, with BBC News currently top of the pile. The Communication Workers Union was the ninth biggest recipient last week, and traffic to its homepage doubled as a result.

However, the site that really caught my interest in the list above was eBay UK. Last week the auction site was the eight biggest recipient of traffic from our Postal Strike search portfolio. Like the Royal Mail, eBay clearly has a commercial interest in the strikes, and it too paid for significant amount of its traffic (23.3%) from the portfolio. Looking at some of the other postal strike related searches it seems that eBay is right to be concerned: the portfolio also includes terms such as ‘amazon postal strike’ and ‘play.com postal strike’.

So, consumers are clearly worried that a postal strike would delay the delivery of goods have ordered online; but has this concern put a significant number of people off online shopping until the situation is resolved? The chart below illustrates UK Internet visits to our Shopping and Classified category, and you can see that over the last few weeks traffic to the category has started is gradual climb up to its pre-Christmas peak at the start of December. Well, until last week that was true anyway. UK online retail traffic actually fell slightly last week – the same week searches for the postal strike really took off.

Coincidence - or is there a link? The best way to find out is to look at the comparable week’s traffic in previous years. The chart below uses an index of visits to our Shopping and Classifieds category to investigate the issue. This year’s increase is illustrated by the blue line, and you can see the slight drop between weeks 41 and 42 (last week and the week before). However, you can also see that last year the drop was even greater (while in 2007 there was an increase).

So, it looks as if last week’s decline can only really be attributed to seasonal fluctuations, despite the clear consumer concern. However, if the strikes do go ahead there may well be a greater impact, including on the type of retailers that people visit (multi-channel players may benefit at the expense of pure-plays, for example). We’ll monitor progress and write about any changes we see, so keep an eye on the blog and our Twitter feed for updates.