Online accounts for 15% of all retail spend
A record GBP 15.2 billion was spent online in the 12 week run up to Christmas 2007 according to first set of official industry figures for the UK
According to the Interactive Media In Retail Group (IMRG) and Capgemini co-authored report “e-Retail Sales Index’ UK online shopping reached an all time high in the run up to Christmas, with GBP 15.2 spent online in October to December bringing the full year UK e-retail sales to GBP 46.6 billion, up 54% on the GBP 30.2 billion recorded for 2006.
Within key sectors such as electrical goods, the research indicates that growth in online sales does come at the expense of high street retailers.
Anthoula Madden, Vice President at Capgemini UK’s Consumer Products and Retail Team said, “Online growth has proven robust and sustainable over the past year, increasing its share of UK retail from 10p in the pound to 15p. Whilst we are yet to see high streets sales decline there can be no doubt online is growing its share at the expense of bricks and mortar retailers and we believe that this trend will continue.”
December’s e-retail sales were nearly 50% higher than last year’s, although demand for online shopping tailed off significantly towards the end of 2007 with December’s Index only 0.2% higher than November’s, reflecting the credit crunch across the UK economy.
The data, collated by IMRG and analysed by Capgemini’s consumer retail team, reveals that peak online shopping occurred in the first week of December where there was a 9% increase in all online sales. This is later than in previous years, indicating that consumers are making the most of pre Christmas discounting and delaying purchases until the onset of the sales.
The final week of the year only saw a reduction in online sales of 4% (compared with -22% in the previous year) suggesting a tendency to go online to spend Christmas money and vouchers and hitting the online sales post Christmas rather than the high street sales.
A record GBP 15.2 billion was spent online in the 12 week run up to Christmas 2007 according to first set of official industry figures for the UK
According to the Interactive Media In Retail Group (IMRG) and Capgemini co-authored report “e-Retail Sales Index’ UK online shopping reached an all time high in the run up to Christmas, with GBP 15.2 spent online in October to December bringing the full year UK e-retail sales to GBP 46.6 billion, up 54% on the GBP 30.2 billion recorded for 2006.
Within key sectors such as electrical goods, the research indicates that growth in online sales does come at the expense of high street retailers.
Anthoula Madden, Vice President at Capgemini UK’s Consumer Products and Retail Team said, “Online growth has proven robust and sustainable over the past year, increasing its share of UK retail from 10p in the pound to 15p. Whilst we are yet to see high streets sales decline there can be no doubt online is growing its share at the expense of bricks and mortar retailers and we believe that this trend will continue.”
December’s e-retail sales were nearly 50% higher than last year’s, although demand for online shopping tailed off significantly towards the end of 2007 with December’s Index only 0.2% higher than November’s, reflecting the credit crunch across the UK economy.
The data, collated by IMRG and analysed by Capgemini’s consumer retail team, reveals that peak online shopping occurred in the first week of December where there was a 9% increase in all online sales. This is later than in previous years, indicating that consumers are making the most of pre Christmas discounting and delaying purchases until the onset of the sales.
The final week of the year only saw a reduction in online sales of 4% (compared with -22% in the previous year) suggesting a tendency to go online to spend Christmas money and vouchers and hitting the online sales post Christmas rather than the high street sales.
Following the lead of US traders in 2006, several leading retailers, including Marks & Spencer, Dixons and Comet, ran online sales promotions on Christmas Day itself, attracting significant levels of business while the high street shops were shut. Four million people shopped online on Christmas Day 2007, spending an estimated GBP 84 million, an average of approximately GBP 21 each.
The largest sales growth can be seen in the specialist e-retail sectors e.g. the electronics sector saw sales growth of 60% in December 2007, indicating that online is increasingly taking the lead. The clothing sector shows a 28% increase on the same point last year and the beers, wines and spirits sector shows over a 20% increase.
The research shows that the retailers who have both a high street and an online presence seem to have done better than the ‘pure-plays’, and multichannel strategies seem to be paying off.
The online winners were retailers such as John Lewis and Sainsbury’s, who spent time and effort revamping their websites and addressing their supply chain delivery capability including and brands like M&S whose online channel grew 78% while reported high street results were disappointing.
