Online retail sales in the UK outperformed other modes of shopping as people are increasingly finding it an easier way to save money and utilizing online discounts during economic crisis.
An online retail industry body IMRG along with consultants Capgemini said that the UK online spending outperformed the wider retail industry in December 2008 by posting an increase of 14.2% over December 2007, but the growth was slower than earlier months in 2008, as reported by guardian.
Total online spending valued more than £4.67 Billion in December 2008 which implies spending of £76.67 per person on an average. Online alcohol sales in December 2008 rose 13% against November 2008, but they shrunk 16% compared to December 2007. On the other hand, online sales of gifts and electrical surged 7% and 5% respectively. Although clothing sales were flat in comparison to November 2008, they were 32% higher from December 2007. Overall, online retail sales pegged at £43.8 Billion in 2008, up 25% from 2007.
The upsurge in online retail sales is believed to be triggered by the economic downturn due to which people are increasingly opting for online shopping as the most cost-effective way to shop than traditional modes. Retailers are also exploiting the potential of Internet to lure shoppers with attractive discounts and promotions. Moreover, online shopping is the most convenient and easy mode of shopping. Thus, the growth rate of the UK’s e-retailing as a whole has accelerated.
Besides, retailers adopting more flexible systems to fulfill their customers’ demands have given impetus to the growth of this industry. Brands (incompetent to establish their identity in cross-channel environment) are utilizing Internet to provide efficient and convenient services and thus, getting higher conversion rates and big average shopping baskets.
Amid the credit crunch, two-thirds of the consumers were reported to have spent higher at websites in 2008 over 2007.
It is expected that online sales would continue to rise by 15% annually in future to reach £50 Billion in 2009 as higher number of people are expected to go for Internet shopping and also due to availability of faster and inexpensive broadband services.
According to a Research Analyst at RNCOS, “It is evident that the recession has been accelerating the growth rate of online retail sales and negatively affecting its traditional counterparts. In fact, for the first time, online sales are contributing significantly in the mainstream spending. In 2008, online retail sales accounted for 15% of the total UK retail sales.”
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