The current global economic crisis has caused a shift in consumer behaviour online. Due to lack of available credit and stock market fluctuations, consumers worldwide have had to curtail their expenses. One would think that this lack of credit would have a negative effect on online sales; however, evidence from various sources suggests the opposite.
According to a report by UK-based online research firm Hitwise, the nationalisation of banks and fluctuations in the stock market have compelled consumers to seek help on the internet. According to the report, there has been an increase in visits to price-comparison sites and financial news sites to receive regular updates.
According to Hitwise, the reason behind this online behaviour is the fact that the current economic crisis is the first to occur during the internet age. Therefore, people are turning to the internet - as they normally do on a daily basis - to find cheaper deals and information on how to cope with the crisis.
More relevant to online consumption however, is the growing popularity of price-comparison sites. Hitwise has recorded a 20% rise in traffic in retail price-comparison sites in the UK, as people suffering from the credit crunch hunt for bargain deals. The report also states that online retailers have weathered the economic crisis, and that online purchases of clothes, books, CDs and DVDs remain popular.
“We find people that make use of price-comparison sites are genuinely interested in purchasing products online, and therefore the leads generated by these sites are of high quality,” says Justin Drennan, managing director of South Africa’s leading online shopping site www.wantitall.co.za.
With consumers worldwide more concerned with how they spend their money and a can-do attitude when it comes to sourcing products for their clientele, www.wantitall.co.za has consumer interests in mind. Even in the face of a recession WantItAll showed record-breaking growth last year.
“We restructured in mid-2008 as an urgent cost-saving exercise,” adds Terence Murphy, co-founder of www.wantitall.co.za. “Even though the Rand lost traction to the Dollar, it just showed that consumers were still able and willing to pay for premium goods.” These statistics are especially noteworthy when placed in an international context. Online shopping statistics dropped 3% this last holiday season in comparison to December 2007. As only half of South Africans shop online, there is much more room for growth. So what do South African’s love to buy online? “We’ve found the new ‘Twilight’
In light of the current economic crisis, local online shopping site www.wantitall.co.za is set to grow, due to its proactive approach to providing goods for their clients. The increase in internet usage has helped www.wantitall.co.za achieve success in the online market, and the site was recently awarded the 2008 South African E-Commerce award for Best Jewellery and Watches Store.
Their strategy in regard to product sourcing is significant, considering that online shopping is still a developing market in South Africa, with internet usage figures set to grow 13% in 2009. There is general growth in the online space, and online stores are able to benefit from new users entering the market, whereas traditional retail is already.
“We have positioned ourselves as a niche online shopping site,” says Drennan. “We specialize in obtaining products which are not traditionally available in South Africa. With that in mind, we’ve been able to focus on the ‘long tail’ of retail – meaning we are able to import almost all products which you can’t find in South Africa.”
“We believe that our online shopping initiative should weather the effects of the global economic crisis, despite the financial limitations imposed by lack of available credit,” concludes Drennan.
NOTES FOR EDITORS:
Sources:
Fitzgerald, M. (2008) “Financial crisis changes consumers' online habits”. Available at: brandrepublic.com [Accessed 23 February 2009]
“WANTITALL.CO.ZA ANNOUNCE TOP SELLING PRODUCTS FOR 2008!” (January 2009) Available at: jump.co.za [Accessed 23 February 2009]
“All the 2008 SA E-Commerce Awards winners” (November 2008) Available at: bizcommunity.com [Accessed 23 February 2009]
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