Prevailing economic uncertainty has failed to permeate the UK’s online retail market, with sales set to top £14 billion this year, according to the Interactive Media in Retail Group (IMRG).
In a report issued to coincide with the UK’s first National Internet Home Shopping Day (24×7 Day), the industry body sings the praises of internet shopping, which now has 12 million users and is growing at a time of slowdown in the retail sector as a whole.
UK consumers shelled out £4.8 billion online in the first half of 2003, double the spend of the same period last year, and the internet appears to have come of age as a shopping medium. This year will see sales of £14 billion, 84% higher than last year’s £7.6 billion.
“The relentless growth in online shopping in defiance of the current harsh trading conditions, and in sharp contrast to depressed financial performances from High Street retailers, reflects mass consumer recognition of the value and convenience it offers them,” says Jo Tucker, IMRG’s managing director.
After the productive Christmas season (see Forecasts), online shopping again topped £1 billion in January, representing 6% of all UK retail. The IMRG index, which tracks online retail sales was 128% higher then the same period last year, as consumers waited for the sales to make purchases, putting intense pressure on retail margins.
The index hit 1,000 for the first time in April and sales were 137.5% higher than in 2002. Sales were down in May as the so-called ‘Baghdad bounce’ petered out, but the immediacy of the web enabled retailers to respond quickly to the drop in demand.
“The internet gives merchants real-time feedback on consumers’ buying moods, and the IMRG Index records just how extreme and rapidly changing these can be,” said Tucker.
“Before we had an IMRG Index, analysts estimates of e-retail market sales would routinely vary by a factor of ten or more. We hadn’t a clue what was really going on. Now we are measuring industry performance with great precision.”
