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Credit Crunch Causes Increased Consumer Dependency on Search and Online Comparison
OK, the so called credit crunch is here and the way things are going it doesn’t look like it’s going to be over any time soon. As hopeless and depressing as it seems particularly so if you’re a retail bank, it’s not all doom and gloom. Experian Company Hitwise released a series of figures late September to reflect the effect of the credit crunch on online users approach to search.
Online business continues to thrive despite the mood of the nation. It seems that rather than not spending altogether, online users are simply adjusting their habits to more cost effective searching. Despite the fall of the property market Hitwise published that search and sales for home ware and garden products are up 20% as Britons are “cocooning themselves in their current homes.”
Consumers in the UK are relying more and more on the competitive nature of the internet to ease their financial strain and insecurities caused by the looming recession. ‘Hitwise’ highlight three main ways in which UK online activities have evolved.
- Consumers are spending more time online using search engines and comparison sites to find the most competitive prices.
UK consumers are increasingly using price comparison and other discount websites to find the cheapest deals online. Following a 2 year decrease in traffic levels, UK Internet visits to retail price comparison sites increased by 20% between July 2007 and 2008.
Similarly, searches for the summer sales have trebled this year compared with last, while consumers searching for discount vouchers have led to a 130% increase in traffic to specialist voucher websites.
- Property searches fall dramatically, but traffic to House and Garden retailers has reached a new high as people look to secure their futures in their current homes.
The credit crunch has hit online house sales very hard: in August 2007, websites in Hitwise's Business and Finance - Property category accounted for 0.85% of all UK Internet visits, but last month (August 2008) this figure fell to 0.55%.
It’s obvious that the national financial turmoil is affecting property search behaviour, with UK Internet searches for 'houses for sale' down 53.1% between August 2007 and August 2008.
- Brits are trading ethical consumerism in favour of energy efficiency.
Online searches for ‘ethical’ products such as fair trade and organic have not increased over the last year, but despite this searches for energy efficiency phrases like 'loft insulation' and 'under floor heating' have more than doubled over the last 12 months. Also, UK Internet traffic to gas and electricity providers have also doubled over the same time frame.
This is likely a tandem effect which coincides with Brits securing themselves in their homes for the long term.
Looking at this from a historical perspective, this is the first global scale financial and economic issue to have occurred since the birth of the internet. It’s no surprise that consumers are using this resource not just to save money and get more competitive quotes but also in terms of social and community style resources.
Individuals and groups are using online to share tips and give advice on how to live more cost effectively and beat credit squeeze. Everything from “do it yourself” home improvement solutions to customising your old clothes into new outfits. Not only this but online is teeming with discussions and debates on how and why the credit crunch started and who is to blame.
All in all it’s clear that the online audience is very aware of the current economic climate and businesses need to adapt and put more emphasis on their online marketing channels to make the most of the UK’s audience’s reliability on the internet during this time. It is also likely that even if the credit crunch is over in the next year or so, users will preserve the habits they pick up during this time and they will continue to rely on the internet to assist them in maintaining a cost effective lifestyle.
Chris Woods
Mediarun Search 24th October 2008
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