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News - 2 July 2010

The UK loves shopping online

Over the last ten years the internet has lured the UK consumer from a position of mistrust and apprehension through various stages of enlightenment into what is now a full blown love affair with online shopping.

In the last decade UK shoppers spent £250 billion online. It is predicted that the next decade will see that figure double.

UK consumers spent £250 billion shopping online in the last ten years. The figures come from the IMRG Capgemini e-Retail Sales Index, which has been running for ten years.

Our love affair with online retail therapy shows no signs of abating, with sales during 2010 alone expected to hit £56 billion.

That figure contrasts sharply with the numbers captured in the Index’s first year. During 2001 UK e-retail sales were just £1.8 billion with just six million Britons shopping online.

The Index’s performance over the last decade tells the story of e-retail success in awe-inspiring numbers. It has grown by 5,772% since launch and continues to track the rise and rise of an industry that still continues to grow, despite the continued challenging economic conditions.

The Index tracks not only the UK’s macro economic picture, with 35% growth during 2006 slowing to 14% during recession-torn 2009, but also the fortunes of individual market sectors.

Peaks in sales of beers, wines and spirits are seen to track the success of the English football team in major tournaments. Sales of clothing online have exploded as rich media imagery has enabled fashionistas to pan, zoom and see items on the body via video clips. Home & Garden is the latest sector to be broken out and will provide insight against the background of the UK’s troubled housing market.

IMRG Chief Executive James Roper said, “Britons are passionate about shopping online. The combination of ease, convenience and 24/7 access is incredibly compelling. We expect to see that relationship strengthen over the coming decade and by 2020 we predict that the internet will account for half of all retail sales and influence most of the other half.”

Chris Webster, Vice President, Retail Consulting and Technology, Capgemini, commented, “The change in shopping habits over the last decade has been phenomenal. The internet has become the first destination point for many consumers looking to get the best deals, and retailers have stepped up to the mark by providing extremely compelling propositions. The challenge for the next 10 years will be for e-retailers to increase their share of the market even further and come up with new ways to extend brand loyalty.”

So, what else does the next ten years hold for online retailers? IMRG predicts greater cross-border trading as the UK market continues to mature. With it will come challenges from European legislators, the need to meet different cultural tastes and payment preferences.

Mobile commerce is set to become the defining technological advancement of this decade. Improvements in handsets, browsers, content and data packages mean

m-commerce’s time has come.

IMRG and Capgemini predict that the UK’s online retail market will grow by 110% in the next decade, reaching £123 billion by 2020. According to their forecast, growth will slow down to 6% year on year, as the market matures and reaches a tipping point.

Read related items on:
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Roper, James
Webster, Chris

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