On Internet Business

Online retail growth impressive

Posted by Michael under Online Retail

In the UK there’s been a 17% market growth in online retail comparing July 2008 with July 2009. That equates to the British consumer having spent £4.2 billion on online shopping in July.

E-retail winners and losers

The biggest drivers of the increase are clothing, accessories and electrical goods, according to the IMRG Capgemini Index which measures e-retail sales.

Fashion has been faltering in the high street with some stores (TopShop) doing well while others (Zara) appearing to struggle to maintain market share. Inditex, the clothing group that owns Zara is predicted to report a 12.6% drop in half-year profits. But in e-retail, the clothing index has performed above the overall market with an average of 20% year-on-year growth to date.

Reasons for the continuing success in difficult trading times include the new sophistication of online selling, which has brought a new level of intimacy to their communications with former customers as well as better targeting of new market share. This has led to better conversion rates.

One e-retail sector that doesn’t seem to have benefitted is booze. July saw the first drop in sector sales for five years, with a 23% decline on July 2008.

Men outspend women online

Fascinating snippets from the online retail sector reveal that:

• men outspent women by £672 in the six months to April 2009 according to PayPal, which may account for the increase in sales in electrical goods, traditionally a male purchasing preserve
• the Co-operative Travel Group predicts its web-based sales will rise by nearly 300% from £3 million to £11 million in the next 12 months, possibly in part driven by deals and special offers
• online searches for UK-based discount vouchers have increased by nearly 50% in the past year, say Hitwise.

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