HITWISE UK CHRISTMAS RETAIL UPDATE

High Street retailers overtake pure-play retailers online

London, Thursday 15th November  Hitwise, the leading online competitive intelligence service, today reveals that high street retailers received over half of all UK Internet visits to online retailers during October (based on two Hitwise custom categories consisting of the top 50 high street and non-high street online retailers in the UK, excluding online auctions and ticket retailers). 51.1% of visits were to an online retailer that also has an offline presence, such as Argos, Marks & Spencer and Next, while 48.9% were to a retailer without a high street presence, such as Amazon, Dell and ASOS.

"Traditionally high street retailers receive less online traffic than their pure play online competitors, except during the Christmas and January sales period," commented Robin Goad, Research Director for Hitwise UK. "In 2006 high street retailers only overtook their online rivals during the peak month of December, but this year they overtook in September and have been widening the gap ever since. It looks like this year will be a bumper Christmas online for traditional bricks and mortar brands."

Search marketing is the secret of the high street's success

Search engines are the largest source of traffic to both high street and pure-play retailers online. However, high street retailers were more successful at gaining traffic from search engines during October, with Search Engines accounting for 37.1% of their upstream traffic compared with 30.4% for the for pure-play online retailers.

Email marketing is also an important source of traffic for retailers in the run up to Christmas, with one in 20 visits to a Shopping and Classifieds website coming from web-based email sites in October. Analysis from CheetahMail, Experian email marketing and web site analytics company, reveals that UK consumers in October spent an average of £85 online in response to permission-based email offers from apparel retailers. 

Traditional retailers using email marketing to capitalise in the run up to Christmas is a shrewd move, according to Steve Lomax, CheetahMail's European Managing Director. "As we get closer to Christmas, we'll see email marketing accelerate as traditional retailers use it as a major sales tool to advertise 'last minute' online-only promotions, but also to drive footfall for specific in-store offers. It's a case of them making sure they get the best of both worlds."

The Apparel and Accessories sector has seen the largest online growth of the 19 Hitwise retail sub-sectors, increasing its share of online Shopping and Classifieds visits from 6.6% to 8.4% over the last 12 months. The sector now accounts for one in every 12 Internet visits to the retail sector. The top three Apparel and Accessories retail websites in October were Next.co.uk, Asos.com and Topshop.co.uk, while "next", "asos" and "topshop" were also the three most searched for terms sending traffic to the sector.

In October, Next.co.uk continued to lead the Apparel and Accessories category, receiving twice the market share of visits and two and a half times as many brand searches its nearest rival, Asos.com. However both Asos.com & third placed Topshop.co.uk have seen a steady growth in visits over the last year. Both sites index highly with females aged 18-24 and capture a higher proportion of traffic from the North West region and London than Next.

Fig 1: Five fastest growing retail sub-sectors, market share of UK Internet visits, October 2007

Fig 2: Top 10 Apparel and Accessories retailers ranked by market share of UK Internet visits, October 2007

About Hitwise:

Hitwise is the leading online competitive intelligence service. Only Hitwise provides its 1,400 clients around the world with daily insights on how their customers interact with a broad range of competitive websites, and how their competitors use different tactics to attract online customers.

Since 1997, Hitwise has pioneered a unique, network-based approach to Internet measurement. Through relationships with ISPs around the world, Hitwise's patented methodology anonymously captures the online usage, search and conversion behaviour of 25 million Internet users. This unprecedented volume of Internet usage data is seamlessly integrated into an easy to use, web-based service, designed to help marketers better plan, implement and report on a range of online marketing programs.

Hitwise, a subsidiary of Experian (FTS: EXPN) www.experiangroup.com operates in the United States, United Kingdom, Australia, New Zealand, Hong Kong and Singapore. More information about Hitwise is available at www.hitwise.com.

For up-to-date-analysis of online trends, please visit the Hitwise Intelligence-Analyst Weblogs at http://weblogs.hitwise.com and the Hitwise Data Center at www.hitwise.com/datacenter.

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