Online sales will rise as high-street sales fall this Christmas

23 Oct 2008

The credit crunch and subsequent recession will result in a surge in online spending over high-street retail spending this Christmas, as prudent shoppers will shop early to purchase smaller items.

And one Irish company is standing in the wings, ready to capitalise on the seasonal trend.

Kieron Guilfoyle, managing director of the 3V online Visa voucher company says that the credit crunch has impacted on people’s willingness to borrow on credit, and this will result in demand for alternative payment solutions.

Future Human

Guilfoyle’s company, 3V, makes disposable credit card vouchers that consumers can purchase behind the counter of newsagents for cash. The company sells the vouchers in more than 4,500 merchants across Germany, 17,000 merchants in the UK and 1,100 in Ireland.

“Credit card debt is like mortgage debt and is securitised in the same way,” says Guilfoyle. “Thanks to the credit crunch, a lot of this money has now disappeared. This is leading to an increase in rejection for credit and increased APR and usage charges.

“Securitisation of credit card debt has decreased 65pc in the last few months.”

The broad consensus among e-commerce vendors and consumer electronics manufacturers is that the credit crunch will lead to fewer people spending in restaurants and pubs, preferring to invest in home comforts.

Guilfoyle agrees and asserts that the credit crunch could actually bring about a tipping point in online transactions.

“We’re finding our business has been growing, particularly in the past three to six months, because people who are maxed out on credit or who don’t want to leave a financial trail online are looking online for value.

“From what we’ve seen, the e-commerce market will prove to be stronger than retail this Christmas.

“A lot of people are flocking to eBay looking for bargains. What people are going to buy during the downturn this season will be small items such as books, CDs and DVDs or concert tickets. Sites such as and CD WOW! will do well this year.

“It will bring about the predicted tipping point for e-commerce sales in the Irish market. As broadband usage has increased, people will transact more online.”

In effect, many more Irish shoppers, who in previous years didn’t shop online, will opt to do so this year.

“Electronic goods may also thrive this Christmas. For example, handheld GPS navigation devices can be bought online from the US for 20pc of what they cost here,” Guilfoyle says.

By John Kennedy

Pictured: Kieron Guilfoyle, managing director of disposable credit card company 3V

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years