On Internet Business

UK online retailing market to grow 13.3% in 2009

Posted by Michael under Online Retail

Verdict Research predicts online retail sales will reach £31.2bn in 2013 accounting for 10% of all retail sales.

 

 In the UK overall retail sales are expected to shrink by 0.6% this year, however Verdict Research in its report, UK e-Retail 2009, has predicted that the online retail market will grow by £2.4bn (13.3%) to £20.9bn and by 2013, it is expected to reach  £31.2bn accounting for 10% of all retail sales.

 

UK e-Retail 2009 is a new report published by Verdict Research that analyses the reasons behind the continued growth in online retailing and identifies the strategies that retailers can use to maximise the commercial potential of their online presence.

 

In 2008 there was a 1% (34.4m) increase in internet users and 18.1% (26,7m) increase in online shoppers. It is estimated that each of these individuals is spending an average of 5.8% more compared with 2007. The increase in the number of internet shoppers and higher expenditure per head will drive growth in the online retail sales sector.

 

According to Verdict:

 

“Internet prices are frequently cheaper than they are in physical stores and shoppers are able to more easily search out bargains, including second-hand goods. Moreover, as a method of shopping, it is disproportionately popular with the more affluent, and therefore more resilient, AB shopping class. For this increasingly time-pressed group, making effective use of their limited leisure time is of the utmost importance. Indeed, Verdict’s report revealed that the AB group is now responsible for a massive 56.8% of all online spending.”

 

Online shopping is more popular among the affluent groups and about 56.8% of online spending comes from middle-class and upper-middle-class consumers.

 

“Those with less money to spend are turning to the Internet to search out bargains on branded items like electricals,” says Malcolm Pinkerton, senior retail analyst at Verdict and author of the report, using the British term for consumer electronics. “Additionally, the more affluent groups, who do still have money to spend, continue to appreciate the Internet for its convenience, making the channel doubly resilient to the downturn.”

 

“With the expansion in market capacity slowing, retailers are inevitably going to find themselves having to compete much harder against their rivals in order to achieve the same levels of growth that they have previously become accustomed to,” Pinkerton adds. “Success will depend on a company’s ability to create retail theatre and a consistent shopping experience across all channels, with highly differentiated, targeted, propositions heightening the consumer experience. In addition, retailers will need to become more adept at using technology and unfailing at implementing innovations on their websites.”

 

He concludes, “The key for individual retailers is to formulate two clear strategies, one for succeeding through the recession and one targeting growth beyond this, as the online channel begins to approach maturity.”

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