Boom and bust?

10:35am Friday 14th December 2007

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CHRISTMAS shopping does not have to involve queues, crowds and bad tempers any more.

Just a few clicks of the mouse and the worldwide market place is at your finger tips. You can have whatever you want, from anywhere you like, delivered straight to your door.

That may be great news for shoppers, but what how does it affect traders?

Yesterday, Banana Warehouse owner Dave Dee said the online marketplace could push him out of business.

"I think a lot of it's to do with eBay, but also the computer in general," he said.

"I think eBay is affecting my business because people are buying stuff from it instead of our shop.

"I think there is a danger of this putting us out of business."

Dave is not the only trader to be feeling the pinch.

Last Christmas, one-in-four gifts was bought over the internet and this year it is estimated that we will blow £13.8 billion on them.

In fact, the total e-retail sales during the last three months of the year are expected to hit £17.6 billion, up 82 per cent on the same period last year.

We got off to a good start on Monday, when UK shoppers spent £767,500 on the internet in a single minute.

According to a study by price comparison website uSwitch.com, prices online are on average 13 per cent cheaper than in the shops.

James Roper, chief executive of the Interactive Media in Retail Group, which represents UK internet retailers, offered a message to consumers.

"With demand so high, shop early," he said. "The message to retailers is: don't get caught out by this huge consumer appetite for online shopping."

So, with such bargains floating around in cyber space, what is the effect on York traders?

Dave Dee has started selling his own stock via the internet, to combat the effects of a burgeoning electronic marketplace.

Carolyn Dunn, the chief executive of York City Centre Partnership, which brings together retailers and City of York Council, says many city centre traders were branching out on to the internet.

"Certainly, more and more people are shopping on the internet now and it does present competition to retailers who have physical shops, but canny retailers tend to make the best of both worlds and will have a website in operation side by side with their actual outlet.

"I think in general terms one balances the other."

In York, festive events such as St Nicholas Fayre and the Bavarian Market try to tempt people from behind their computers and on to the streets.

"I think that given the national picture that consumers are keeping a tighter reign on their spending this year because of high interest rates and utility bills that York is holding its own," said Ms Dunn.

"We've still the peak run to come because people tend to leave it fairly late, particularly this year when the multiples (chain stores) are starting their sales early and offering discounts."

Adam Sinclair, chairman of York Business Pride and manager of Mulberry Hall, believes an online presence is essential.

"Everybody does everything in relation to the internet," these days," he said. "People research things online before they actually go physically shopping so it makes sense to have a website."

The internet has not hurt Mulberry Hall, says Adam, and sales in the shop are the same as last year.

"Our impressive online presence is assisting our retail business as it's driving people into the store who might not have known about it otherwise," he said.

In his opinion, traders who offer something different are holding up best against internet competition.

"From what I can gather, it is national department store groups having a difficult time, the ones who are offering the same things as everybody else."

They will be the ones under pressure to cut prices, he believes.

A spokeswoman from Browns, which has stores in York and Helmsley, said the internet was no competition.

"We don't have a website as such, it's something we're just trialling and we won't be setting it up until January next year," she said.

"As far as we're concerned the internet is not affecting our business at all.

"At the moment we're having a really good Christmas. Handbags and accessories are flying out."

The trader who has both

IT is very important for shops to have a web presence, says York trader Angus McArthur.

This year, his takings at Snow Home, in Gillygate, would have been down if it had not been for his website.

Happily, the increase in online trading has balanced out the losses in the shop.

"My website now does have a significant impact on the turnover of the business," he said.

"Last year it represented about 12 per cent of the turnover and this year has seen definite increases on that.

"If you have both a shop and a website then it means you're not missing out on too much - as sales in the shop go down, sales on the website go up."

It is important to realise that changes in shopping trends will affect your business, says Angus.

"At this time of year, people are sat at home in the evening because they're so busy and then shop online because it's easier, and I've done it myself this year.

"Websites do affect sales and I think it's important for all shops no matter how small to have a web presence otherwise it is the small business who lose out because big websites like Amazon entrap all the shoppers."

Angus has not felt pressure to reduce prices because of internet competition.

Instead, he has tried to become more specialist.

"I have an ideal I like to maintain and I think that's important," he said.

"Trying to source more individual products to set me apart from everybody else is probably the way to do it. People do come to me because I'm the only place you can get certain things."

The online trader without a shop

ENTREPENEUR Sarah Jane Robertson set up her online boutique seven months ago.

The 23-year-old, who lives in York, did not have the time to set up an actual shop, as she works as a graphic design consultant by day.

An internet boutique was a low risk solution to furthering her interest in fashion and showcasing young designers.

The designers would not have to pay anything to get their work seen, and she would not have to invest heavily in setting it up, she said.

Because she is targeting a niche market, she had not expected to generate much interest. But she has been surprised by the number of people who have visited www.bettyandjeff.co.uk, bought from it and signed up for her newsletter.

She knows online shopping can lack good customer service, so makes an effort to keep in touch with her customers.

She organises events too, so people can touch and feel the products.

"I think it's important to listen to your customers. I'm very conscious of that because you don't get the experience online that you get in shops," she said.

"Because we're targeting a very niche market then we can reach more people through the internet.

"If we had a shop then there is a chance that we might not be doing as well, but then we might have more regular customers."

Sarah thinks the internet market will only grow stronger.

"You're going to get stumbling blocks and there is a lot of competition out there, but many long-term opportunities too. Now is the time to reassess the market and make sure you keep up-to-date with current trends, keep working hard and watching the market to make sure you don't go stagnant."

Sarah doesn't think internet traders are a threat to the high street, however.

"A lot of high street traders now are launching online - not as a replacement for their shop but to have another dimension and to give shoppers alternatives."

The shop trader without a website

SHOPPING is an experience and you can't get that on the internet, believes Lucy Weller, owner of independent women's wear boutique Selkie, in Low Petergate, York.

Internet shopping does not seem to be harming her trade at all, she says.

She will get set up a website within the next 18 months - but she won't sell all her stock on it.

"It will be more to advertise the shop then anything else," she said.

"In some ways, a website is like another business and you need staff to get things together and send things out.

"I have a friend who has an online business and she has a very high rate of returns because people haven't tried things on and they don't know if it will fit them.

"Things like handbags and belts and jewellery are probably good to sell on the internet because you don't need to try those on to know what they will look like." She does feel under pressure from internet competition, so tries to keep her prices low and her shop looking good.

"You have to keep on the ball the whole time," she admits.

"I have a very beautiful shop with people you can speak to about the clothes, to get a second opinion and to touch the clothes.

"We offer a good service and you can't get the human element on the internet."

Although this year's Christmas shopping season is going well, she stressed the need to support local shops.

"If you want to keep York a lovely place people want to come to you need lovely shops and not just high street ones.

"The competition is a battle and I will do anything I can to fight my corner."

Maddy French asked Christmas shoppers whether online stores would take over

Angela Fuller, of York, said: "It might take over normal shopping but it'll swing back as these things tend to do so. It'll change the way we shop but not completely wipe it out."

Lesley East, of Burnholme, York, said: "I'd rather go into town. I like having a good look round and see what I'm getting for my money. Educationally, it's better for children to see what they're buying."

Louise Haywood, 39, of Cottingham, said: "I've done lots of online shopping because it's convenient. It may be taking over because it's cheaper and easier. It saves time."

Eric Wilkinson, of Holly Bank, York, said: "It'll more than probably take over. I'd never do it though. I suppose you save on things such as travel expenses. Yes it'll take over but not for a while."

Josephine Eberle, of Tang Hall, said: "I know it's more convenient for some people. I do some online shopping but prefer going into town as I like the hands on experience."