Internet takes over as catalogues slow down
The UK’s £37bn (t53bn) home delivery sector grew by just 3.2% in 2005, little more than half 2004’s growth rate of 5.6%, according to Verdict Research.
A slide in sales at traditional mail operators and consumer reluctance to make big-ticket furniture purchases was behind the slowdown, the researcher said.
“While sales via the internet and TV shopping channels made impressive strides, they have not been enough to prevent a sharp drop in growth in the UK?s home delivery market overall, ? said Nick Gladding of Verdict.
“Mail order home delivery sales are down £585m (t842m) on 2002 levels while door-to-door channel sales growth levels have plummeted from 10% in 2004 to just 1.2% in 2005.” Internet sales, however, increased by 28.9% last year, and for the first time more than half of all home delivery shoppers placed orders online.
Amazon extended its market lead with home delivery customers, while other popular online retailers include Argos, eBay and Tesco.
Verdict said that retailers needed to broaden the appeal of home delivery services to increase growth in the sector.
“If home delivery appeared more affordable, the potential customer base for home delivery services could be much larger, ? Gladding said.
“While the cost implications of such a move would prove challenging for retailers, given the inherent price deflation in many sectors of retail, offering free home delivery could be a valuable weapon to win market share from weaker rivals.”
Posted: 10/07/2006
