Online spending: Taking up the £100bn opportunity

Online retail spending continues to grow rapidly. Businesses that are not prepared will be leaving money on the table

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Inside the enterprise: In July, Britons spent a staggering 8.1bn online 14 per cent more than they spent in July 2013.

The data, from the IMRG Capgemini e-Retail Sales Index, show that online spending is continuing to grow, and in some cases, grow rapidly.

The research, which takes information from more than 100 online only and offline and online stores, found that consumers are increasingly willing to pay for the more expensive goods and services over the internet.

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So-called "big ticket" items, including holidays and electricals including white goods and TVs reported the strongest increases. Travel was up 13 per cent year-on-year, and electricals were up 19 per cent.

This, though, will hardly surprise any business that sells online. Over the last few years, spending has continued to move from the store to the internet, with even venerable brands such as John Lewis seeing significant sales through their online channels. Mobile commerce being able to shop on a smartphone will only speed up the trend.

According to Tina Spooner, chief information officer at IMRG, this means that UK online spending is on track to reach 100bn a year, for the first time, later this year. This means it is something businesses cannot ignore.

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This will have implications for IT teams. Larger companies have been investing steadily in online commerce, and the infrastructure to support it. Being able to hold stock and then sell it online and offline known as "multi channel" in the trade is important for enabling companies to bolster their online sales.

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Initiatives such as "click and collect", where consumers order online but pick up goods from stores, have helped to boost sales of more expensive items. So have consumer-friendly returns policies, something online-only retailers such as ASOS have used to good effect to build up their reputations and sales.

Tying warehousing and distribution in to online sales is not always easy. It needs robust systems, which can track stock levels in real-time. Internal stock movements need to be slick: unless a retailer can move items between stores and the warehouses quickly, they can end up having to hold more stock than they need, eating into profits. And it goes without saying the e-commerce website needs to be well designed, easy-to-use and secure.

For smaller businesses, the challenges may be smaller, but it's also likely that there will be fewer experts on hand to help build a multi-channel retail system. But, against this, there are plenty of easy to use, easy to configure online storefront systems. Smaller companies, especially those selling to other businesses, could well take advantage of these.

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Customers, both consumers and business buyers, are increasingly likely to be frustrated if they can't deal with a company online. And, with a potential prize of 100bn in sales to go after, any sales-focused company should be looking carefully at how well it is set up online retailing.

Stephen Pritchard is a contributing editor at IT Pro.

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