By Julian Goldsmith, 18 January 2008 00:01
NEWS
Online sales reached £15.2bn in the UK in the last quarter of 2007 and could account for half of all retail spend in five years time.
The sales index research by Capgemini and IMRG revealed that online retailing reached 15 per cent of total spend on retail and leisure over the whole year.
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Electricals appeared to be a favourite category, with growth of 60 per cent in December, year-on-year. However clothing, footwear and accessories also grew with November figures showing 28 per cent growth compared to the same period a year earlier.
Overall, online revenues reached £46bn in the UK, out of a total £253bn retail sales pot, between December 2006 and December 2007.
Retailers participating in the index found sales growth actually dipped in the run up to the festive holiday, but picked up from Christmas day.
John Lewis Direct head of web selling David Walmsley said: "Our sale started on Boxing Day and in the first four days of the sale we had double revenues compared to the previous year. Customers were even buying out of the sale area. It's possible that people were holding money back and waiting to spend after Christmas."
The researchers noted that rather than growth in online shopping slowing to a natural market share of around 15 per cent, the trend is not stopping. With 50 per cent of households in the UK still without broadband, many retailers still without an online presence and many categories still not represented in any scale online, there is still huge potential for growth, the researchers said.
Many retailers now view online retailing as an essential part of their business strategy.
Walmsley said: "For us, e-retailing stopped being a project and became a central plank of our retail strategy a long time ago. Online is so important to the growth of the business, we can't ignore it now."
For some retailers, their overall size actually hides the contribution their online business make to the economy.
Tesco head of corporate communications Trevor Datson said: "In a mature market like grocery, to have 24 per cent growth is an extraordinary figure. If Tesco.com was listed on its own, its revenues would put it in the FTSI 100."
Comments
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1. Simon Stokes
“From what we have witnessed in the industry, we would echo the results revealed by CapGemini and the IMRG and the increasing importance of eCommerce within the business. However those retailers who are considering, or who have already deployed, their eCommerce solution, need to also be aware of the risks to ensure that they don't rush into this area. According to the many retailers that we speak to, online fraud is the single biggest threat to their business; furthermore the latest UK Online Fraud Report found that online fraudsters are continually evolving into increasingly sophisticated criminals. This is further complicating the switch to eCommerce.
"The underlying issue here is that online fraud is a problem that affects all those in the retail industry – from retailers and industry bodies to law enforcement agencies and consumers. The best way we can defeat these persistent fraudsters is to work collectively and share our experiences with each other so that we are in a better position to help educate the general public.”