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Retailers battling online shopping surge

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Growing trend: almost 40 per cent of Bermudian-based respondents to a survey said they had increased their online shopping purchases between 2014 and 2015

Shopping online has increased in Bermuda, according to a new survey.

However, compared with a number of similar island jurisdictions, Bermuda residents are more likely to shop at local retailers.

And that finding has been hailed as testament to the effectiveness of marketing and communications campaigns aimed at showing customers that, when various shipping, duty and other fees are taken into consideration, it works out cheaper to buy locally than online.

So says Paula Clarke, who represents the retail sector at the Bermuda Chamber of Commerce.

She was reacting to an Island Global Research poll which found that 39 per cent of Bermuda residents said their expenditure on online purchases had gone up or “increased a lot” between 2014 and 2015.

Bermuda buyers said that their main reasons for the switch was not cost, but product range and choice.

However, the island’s online shopping habits are overshadowed by those reported in similar jurisdictions. In Jersey, 60 per cent of respondents said they had increased or “increased a lot” the amount of shopping they do online. In the Isle of Man the figure was 55 per cent, while in Guernsey it was 54 per cent.

Ms Clarke, who is also the chief executive officer of department store Gibbons Company, said: “Island retailers have always been aware of the draw for customers to shop overseas even before the online shopping trend swept through the world.

“You only have to look at the Amazon growth over the last five years, about 20 per cent per year, that has even eaten into the dominant position of Walmart.”

She added: “Price was always cited as the overriding reason to shop overseas, but that battle was won with persistent marketing and communication campaigns educating the Bermuda public that it is indeed cheaper to buy from local retailers than shopping online or taking shopping trips.

“Item price comparisons, such as Gibbons Company’s price match guarantee detailing the true costs of bringing in goods such as freight, duty, wharfage, inland shipping charges and all those fees versus the all-inclusive price for the exact same product in your local department store.

Ms Clarke said: “For an island this size, retailers bring a lot to the table on choice and range of product, but the fact is we are too small to have everything for everyone, but retailers can and do bring in special orders.”

She said the Chamber of Commerce retail and economics divisions have been working with the departments of statistics and customs to conduct a study on the effects of online shopping trends in Bermuda.

“We know the data is there, it is a matter of finding a way to extract the relevant information to keep brick-and-mortar retail relevant to the buying public,” she said.

“Retail is essential to the socioeconomic balance in Bermuda — without retail stores Bermuda will not be an attractive business or tourist destination and the trickledown effect of these business failing is enormous.”

The report said that the Channel Islands and Isle of Man showed similar increases compared to the previous online shopping survey and that it was the first year Bermuda had been included.

It added that the results showed “the ever-growing importance of purchasing online to the island-based consumer”.

The report said: “Price was the most important factor that caused respondents to shop online in Guernsey and Jersey, while convenience was the most important in the Isle of Man.”

It added: “The opportunities and challenges to local businesses created by this growth are profound, not only in the three Crown Dependencies and Bermuda, but also in every other island jurisdiction worldwide.”

Growing trend: almost 40 per cent of Bermudian-based respondents to a survey said they had increased their online shopping purchases between 2014 and 2015
Growing trend: almost 40 per cent of Bermudian-based respondents to a survey said they had increased their online shopping purchases between 2014 and 2015