FREE MONEYS TIPS

We Teach You Till Billionaire

11:34 AM

Terror Attacks May Boost Online Sales

Posted by Zulkarnai Harun Ar Rashid |

Today, Terrorism is a global issue. Terror strikes are not restricted to a single community or religion but encompass the entire world. For Instance, the recent multiple shootings in NewYork at the immigration centre in Binghamton and the last year terrorist attacks in Mumbai --the financial capital of India, that targeted both Indians and foreigners. Such attacks have furthermore raised the security levels across every major country. The risk factor is so high, that the even places of leisure activities such as shopping malls, hotels, stores are on high security alerts. Overall, it has left the common man with feelings of uncertainty, distrust, sadness and loss; greatly affecting the economic scenario as well.

With the rise in such terrorist attacks and the elevated level of threat across the world; Industry professionals are speculating that, such terrorist attacks may give a boost to online sales. Though apparently a paradox, it appears to be a valid deduction based on the current situation. Let us explore this thought further.

Fear Vs Buying behaviour

Studies have specifically investigated how that, in the past, fear for personal safety has impacted consumer behavior. It was found that there is a higher tendency to consume more food and lifestyle products when subjects were confronting with fear of loss or depression. In such a situation, people go out and do what makes them feel good, which is - buy and consume more.

For Instance, in the wake of the 9/11 terrorists attacks, various media reports documented the fact that, Americans were doing all of the things they had always wanted to do, that included, a whole lot of shopping! Studies conducted showed that people purchased more expensive items such as - Rolex watches, automobiles, high-end-clothing, and other utility items, like never before. Although, once the fear subsided, everything returned to normal.

Post the twin bombings in London, the retail shoppers numbers fell sharply. People were unsure of their safety, so choose to stay away from the stores. Ebay, then was considered to be a safer alternative when the country was on a high-security alert.

Shoppers are normally deterred by threat of further disruption or perceived risk associated with in-store shopping. Therefore, Internet shopping seems like a safe medium to purchase products for personal use. Ideally, retailers should have both an online presence and a storefront. Stores with a physical presence that are known to the shoppers are more likely to be considered as safe for shopping online.

Online Vs Inshop

Shopping in the age of terrorism has dramatically evolved. It has made the world a much unsafe place for the rest of us. With the threat of economic recession coupled with shock of the terror attacks, people weigh the risks associated with in-store shopping compared to online shopping.

Forrester reports (Based on 3000 potential US online shoppers, collected on September-October 2008) on shoppers intention to purchase online:

- 48% of consumers surveyed (compared with 41% in 2007) said they can find the best values and deals online.
- 36% of consumers (compared with 22% last year) said they would be more likely to shop online due to high gas prices
- 3 in 4 online shoppers said they prefer to buy from online retailers that offer free shipping, and nearly 6 in 10 said shipping prices deter them from buying online.
(Forrester data)

Forrester report further states that 88% of U.S. online consumers say that they have bought something online in the past. They tend to shop more and more online, whenever possible, than in a physical store.

However, with trimmed shopping budgets and current economic crisis, consumers are hoping to find comparison shopping, free shipping, and better discount deals online, so that they can optimise on their time, effort and money.

Long Term Trends - Good News for Online Retailers and Consumers!

There are indications of large business opportunities in terms of online shopping. After the 9/11 terrorist attacks, and the attacks in the U.S., UK, India and other countries around the world, there has been a shift in consumer trends. Customers prefer to scour for major brands online on popular shopping sites such as eBay, Amazon etc.

Forrester report has some good news for those planning to invest online.

Online sales will account for 7% of U.S. retail sales this year, up from 6% last year. From 2004 to 2010, Online sales are expected to grow 10 percent and 20 percent compound annual growth rate, over the next six years.

Inarguably, online and offline channels present different shopping experiences even when the same products are being purchased. Having said that, consumers do prefer to interact in a virtual environment due to its capabilities to provide Interactivity, personalised experiences, shopping tools, increased product selection and information. Hence, online retailers can boost their sales by ensuring quality deliverables, round-the-clock support system, discounts & special offers, free shipping, and secure transactions. Basically, generating an overall positive customer experience, thereby establishing brand loyalty.

Most importantly, the companies need distinctive online marketing campaigns. Companies that survived the last recession, did so with the help of strong marketing campaigns, reaching out to their customers effectively. Retailers need to work hard to ensure their customers feel secure and happy while shopping with them online and sales will increase automatically.

0 comments:

Post a Comment

Subscribe