Although the recession will likely take a bite out of holiday spending this year, retailers that offer online shopping – otherwise known as e-tailers – are optimistic that Santa Claus will be more than generous.
According to statistics compiled by Gartner Research, online holiday sales this year are expected to double to $11 billion in North America, or $25 billion world-wide.
While that’s still only a small chunk of total holiday receipts, it’s definitely enough to justify the unprecedented level of Web site investment and promotion on the behalf of e-tailers – visit any brick and mortar store’s Web site and see for yourself.
There are dozens of reasons why people are choosing to shop online this holiday.
The first is convenience. You can avoid the parking, the crowds, the long line-ups and the cashier by shopping online, and you can do two days worth of shopping in less than two hours. A package shipped to your home in days, or to the homes of other friends and family members around the world without having to bring it home, wrap it up, and take it to the already overloaded post office.
There is also the question of choice to consider. In the early days, companies would only offer a handful of products online, choosing instead to use their Web sites to direct people to their stores. These days, encouraged by consumer interest, many companies put their entire catalogue online. If you know where to go, the variety of gifts available is enormous. If there’s a drawback to this, it’s that there are almost too many products online to choose from.
The second reason is price – it’s easier to find a deal online, and many sites are offering lower prices or discounts to online customers to promote their sites, building customer loyalty, and pass on their own savings (fewer staff, no bricks and mortar rent or upkeep), to buyers.
The third is availability – because online retailers have central warehouses for their bricks and mortar locations, you can often find and purchase the popular items that stores can’t seem to keep on their shelves.
The fourth reason is customer service. If you’re stumped for ideas, many sites will guide you towards the more popular items. Honest stores allow customers to rate products as well, which can help you to choose between different makes and models. Toy stores are especially helpful, guiding parents towards toys to match their children’s age groups and interests.
The fifth is reliability. Although online shopping is hardly new at this point, for many stores it is only now just emerging as a significant mode for conducting business – they’ve invested considerable time and money in their online stores to get where they are, and they’re not going to blow it all now by not honouring guarantees or screwing up shipments.
The sixth is undeniably security. Although there have been isolated instances of hackers uncovering credit card information (e.g. the recent break-in at Playboy.com), and the odd scare (like a now-patched security hole in Windows XP that would allow hackers to access your credit card numbers), people are feeling more confident shopping online.
In 2000, year-round e-commerce broke the $65 billion barrier, and while that’s shy of industry expectations that e-commerce will be a $400 billion business by 2003, it is still a significant percentage of consumer and business-to-business purchasing. The amount of successful credit card fraud – $3.2 million U.S. in 1999 – is negligible.
According to the Australian National Office for the Information Economy, you have a better chance of being ripped off by an employee of a bricks and mortar establishment, or by phone. The reason is that hacking a companies’ credit card information is difficult for even the most seasoned hackers; that credit card companies are on the lookout for unusual charges, and often call to confirm with customers before authorizing purchases; and that information is a two-way street – every hacker leaves a trail, and as a result the most serious hackers are almost always caught.
There are other compelling reasons to shopping over the Internet.
That said, here are a few things to look for when shopping online:
Secure Payment Engine — A responsible Web e-tailer will use a brand-name encryption and credit card security service, and will provide an explanation of how their system works.
Look for SSL (Secure Socket Layer) encryption protocol, which is built into current browsers and supported by most Web servers. This is almost a basic requirement for secure online transactions, it’s so commonly used, although it is not the only solution and is generally bolstered by other technologies and systems.
Consider the source — if you’re shopping online at a major retailer, they will most likely have the most secure transaction technology available. If you’re buying from an auction site, or a smaller retailer, you might want to consider using a third party like PayPal.com, a public company that processes your credit card information first and then sends cash to the vendor.
If you’re buying used, consider using an escrow service, which processes your payment but withholds the funds from the vendor until you receive your goods and verify their quality. There is usually a charge of between $5 and $10 for this service for small to mid-range purchases. Escrow.ca is one such service.
For a complete guide to shopping safely, read the U.S. Federal Trade Commission guide to holiday shopping online at www.ftc.gov/bcp/conline/pubs/alerts/shopalrt.htm.
Keep in mind that credit card companies reimburse for about 90 per cent of credit card fraud where the victim can prove they acted diligently. So act diligently and sleep a little easier these holidays.
