Online retailers predict flat sales this holiday season
"The Christmas season in Poland (in general) this year has not been affected by the (economic crisis), especially in Warsaw, so people are buying as they were last year." - B. Wiśniewski, Centrum Handlu Internetowego.
Most of Poland's largest online retailers expect flat sales during the holiday season compared to last year, although December will yield online revenue twice as high as their sales in other months.
Some industry professionals say that the economic downturn is the main factor forcing online shoppers to clutch their purses.
"Looking at the overall market, holiday e-commerce will not be growing at such a pace as last year mainly because everybody on the market is ... trying to save money now," said Krzysztof Modzelewski, president of the Internet marketing firm I-Metria. "It's not so much a question of this month being worse than last year, it's more a question that it hasn't grown as fast as it normally does."
Others disagree that the economic downturn is to blame, pointing to the hoards of holiday shoppers cramming brick-and-mortar malls and hypermarkets as proof there's plenty of disposable income.
"The Christmas season in Poland (in general) this year has not been affected by the (economic crisis), especially in Warsaw, so people are buying as they were last year," said Bogdan Wiśniewski, the president of Centrum Handlu Internetowego (CHI), which has operated the Vendi.pl online shopping mall since last September. But he added that online purchases in general still constitute a small percentage of total retail sales.
Besides the national recession, negative news about the Internet sector and bad online ordering experiences may influence holiday sales this year.
"A lot of people have lost faith in the Internet as a sales channel in Poland because the press has been jumping up and down on the Internet's back for the past couple of months, and thanks to the mom-and-pop structure of the market people have very often got bad service," Modzelewski said. "A lot of people remember last year when many stores were unable to deliver products on time or at all."
Despite the economic gloom, online malls that offer items from a collection of stores and large sites like portal Wirtualna Polska's Wirtualna Sklep and online bookseller Merlin.pl, will grab the lion's share of e-commerce sales this December as they have good service records and their sites are well recognized by Internet users.
Putting a price tag on the value of December e-commerce sales, however, is almost impossible as several online retailers just started operating within the past year and because Internet research firms usually provide yearly, not monthly, sales figures and forecasts.
According to an I-Metria report on business-to-consumer e-commerce, online sales totaled zł. 150 million ($37.5 million) in 2000. At the end of the first half of 2001, Poland's 850 online retailers raked in zł. 115 million ($28.75 million) in sales with forecast revenue of zł. 120 million ($30 million) for the second half.
Yet, Polish online retailers expect to see the most orders placed this week, just as they were last year, although many took efforts to advise holiday shoppers to order early to avoid last-minute deliveries - a year-round problem.
"Those problems will be exacerbated during the holiday season," Modzelewski said.
Easy Net, which operates the online retail sites for EMPiK, Galeria Centrum and Smyk, posted a message on their Web sites urging orders to be placed no later than mid-December to avoid rush deliveries. "Sometimes our employees take presents and deliver them (just in time) for Wigilia," said Hanna Konarowska, Easy Net's new business director.
Nevertheless, some of Poland biggest online retailers have been trying to entice holiday orders with promotional offers. For example, Easy Net's stores sometimes give gifts with purchases exceeding a certain value. Salon.pl, a virtual mall for luxury goods, offers free lighters for holiday shoppers who spend more than zł. 700 on cigar purchases and a buy-one-get-one-free fountain pen deal on sales of zł. 800 or more.
Polish online retailers expect the most popular gift categories to be the same as they are year-round with holiday shoppers spending the most money on perfume, books and compact discs. While the better known online retailers say December sales will likely be 100% above revenues during other months of the year, most either cannot provide sales projections or declined to provide information. Likewise, they would not provide specific revenue figures for their December 2000 online sales or give sales order figures for last December and their predictions for online orders this year.
But one online retailer says it's bucking the flat sales growth this holiday season. December sales at Merlin.pl, a 3-year-old online book and music seller, are twice as much per day compared to last year, said Mirka Puczko, a member of the company's board. Merlin.pl tallied up $1 million in online sales last December, she said, but could not predict the total revenue for the same month this year.
Roseanne Gerin
