E-commerce continues to buck economic trends

UK consumers are spending 17 pence of every retail pound online, the latest figures showing internet shopping sales for the last six months have found.

The Capgemini Interactive Media in Retail Group (IMRG) e-retail index today found that, where online spending made up 15 per cent of total UK retail sales in 2007, the latest figures show this has grown to 20 per cent within the first half of this year or £26.5 billion.

James Roper, IMRG chief executive, told IT PRO: “High Street sales have pretty well flat for a long time now, where we seen average month-on-month growth online of about 50 per cent and we expect this rapid pace of growth to continue.”

So much so, at the current rate of growth, the index predicts online shopping could account for as much as half of all retail sales by 2014.

But the figures also revealed that, while e-commerce is bucking the economic trends, it is not completely immune to its effects. Year-on-year growth has so far this year followed the seasonal trends established online, by peaking at Christmas and declining in summer.

Year-on-year, a five per cent decline in sales growth through June was significantly more pronounced than in 2007, leading Roper to add: “There is certainly a diminishing rate of e-commerce growth that reflects the impact of the economic climate, but it’s still very much in its high-growth phase, which we expect to continue for at least the next five years.”

Yet, retail industry watchers said online was not losing out as badly as the High Street because consumers increasingly looked to the internet during the downturn to research and buy at the cheapest prices, as well as save money on fuel used to travel to stores.

Mike Petevinos, Capgemini retail head of consulting, said e-commerce had reached a tipping point where it was heavily influencing pureplay and store-based retailers’ strategies more than ever.

“The downturn will only serve to accelerate recognition of this tipping point because convenience and choice used to be the main proposition for shopping online,” he said. “The critical mass being reached with online sales is starting to affect traditional business models, where you can now order online and collect in store, or where HMV for example, is updating its stores to offer more of differentiated, experiential proposition on the High Street compared to its online presence.”

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