Where were you during the Winter Sales? In the street, online, or just at home - not bothered? With five consecutive interest rate rises, confidence undermined by turbulence in financial markets and the collapse of Northern Rock, retailers have warned for some time that things might become unstuck in the retail sales market this Xmas.

Last week more than more than £1.5bn was wiped off Marks & Spencer’s group market value after Christmas trading was worse than expected, with underlying sales down 2.2 per cent.  Marks & Spencer chief executive Sir Stuart Rose said ‘the UK plc economy had caught a cold’. - That’s one expensive box of tissues!

However, the trend was not universal with department stores such as John Lewis and House of Fraser faring well over the Christmas period. But DSG International, operator of PC World and Currys, and Land of Leather, the furniture chain, have issued profit warnings.

M&S though, is seen as a barometer of the UK economy because of its ubiquitous presence the length and breadth of the country’s collective high street. 16 million customers pass through its doors each week.

What is intriguing about all this is that within the online market, year on year growth has been enormous. In its report due out this week, online retail analyst IMRG indicate that consumers spent nearly £18bn online over the Christmas period, with around £84m spent online on Christmas Day alone.

An article in Computer Weekly (Ian Grant, 11th January) stated that large retailers who issued Christmas trading figures last week, reported that the growth rate of internet sales had outstripped every other sales channel. Sainsbury’s chief executive Justin King said the supermarket chain’s online operation had grown by over 40% during the last quarter alone.“In the week before Christmas we delivered 90,000 orders, up over 50% on the previous year,” King said. “We now operate the [online] service from an additional nine stores.”IMRG predict that Internet shopping could account for half of Britain’s £300bn retail market by 2018.What this means for retailers such as M&S, Sainsburys, Next, Argus, and all of the other household names is that a remarkable transformation is needed. Companies that have spent decades honing their business plans and market strategies, will have to to it all again but in a fraction of the time if they are to secure their market share in the online arena.

The real challenge will be set for IT Directors. They will have to ensure that their company’s professional, simple to use, attractive web front end, is met by equally strong supply chain processes. The retail online revolution is much more than working out how to present your high street shop within a browser. It’s a recasting of the entire organisation to ensure the company can deliver on the promise of the Web. 

 There is not much time to get it right. 2018 could come around faster than ten years would suggest.