Web sales grow as the high street declines

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The Interactive Media in Retail Group has revealed its annual figures for online UK Christmas shopping. The IRMG report, which is carried out yearly with analysts Capgemini, shows that shoppers spent some £4.67 billion online just in the month of December.

However, despite this sales were higher in November for the first time since 2002. The IRMG found that in December sales dropped by 1.5 per cent against November, which enjoyed the year’s highest sales weekend. Other figures include the facts that a third of shoppers did more than half of their shopping online, with about 60 per cent spending more online this Christmas than in the previous year. Clothing, footwear and accessories showed the highest growth, clocking up around 30 per cent year-on-year increases every month during 2008 in the IMRG sales index.

Much of the growth is put down to the credit crunch by Capgemini, which said that online spend could continue to grow whilst the high street suffers.

Mike Petevinos, Head of Consulting for Retail for Capgemini UK, said, "Our research provides further evidence that consumers are turning to the internet as the most efficient way to save money in the downturn. It is also clear that retailers are seizing the potential of the internet to reach shoppers with targeted discounts and promotions. These factors have led to the robust growth rates we are seeing for e-retailing as a whole.”

Figures from the British Retail Consortium(BRC) also show gains for the web. Sharon Hardiman, head of non-store retailing for the BRC said that increases were often at the cost of high street or traditional retailers. However she suggested that these were just seasonal gains.

Hardiman said, "The sharp contrast between December's strong non-store sales growth and the previous month indicates customers are increasingly confident with leaving internet shopping until Christmas," adding that while e-commerce sales grew by 30 per cent, so total retail sales fell by roughly 3 per cent.

James Roper, chief executive and founder of IMRG, said that increased flexibility in the way that firms serve customers is helping boost the industry. “It is becoming apparent that the recession is accelerating the rate at which the internet is impacting the retail sector", he said. "The traditional retail model in which stock is held in an outlet for collection by the consumer is giving way to a hybrid model that emphasises the store’s role as a display area and leisure destination, and the value of both these aspects diminish in a recession. Brands that are nimble in a cross-channel environment give their customers a more efficient, easy-to-use service and are rewarded with increased conversion rates and larger average shopping baskets."

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