UK Online Shopping To Reach £80bn By 2009
Internet retailers can look forward to huge sales boosts within the next five years says Interactive Media Retail Group (IMRG), as one in four purchases are expected to be made online.
Laura Wade-Gary, chief executive of Tesco.com said: “You only need to look at the business we did last December (2003) to see how fast we’re growing. We did as many sales in December as we did in the whole of 1998.”
E-retail will be boosted as shoppers’ confidence grows thanks to improvements in range, quality, service and new payment methods technology.
IMRG, whose members include retail giants Arcadia Group, Tesco, IKEA, easyJet and lastminute.com, said: “Brands that don’t want to find themselves shunned by shoppers have to provide efficient online shopping services. This is now what consumers have come to expect”.
New payment technology introduced on 1 November 2003 has seen consumer confidence rise according to IMRG members. The secure online payment system is accredited by the Internet Shopping Is Safe (ISIS) initiative.
Consumer confidence was ranked as top priority by IMRG last year but thanks to new developments, this year it ranked 9th place, being replaced by customer retention strategies and effective marketing.
UK consumers have the most trust in web technology. Twenty million (27%) UK shoppers are expected to make online purchases this year, compared with only 16% of EU consumers, the key reason is lack of confidence said the European Commission.
David Byrne, The European Commissioner for Health and Consumer Protection said: “Developing a thriving ecommerce sector is vital for the competitiveness of Europe’s economy. We cannot do this unless European consumers are prepared to shop online.”
Other industry analysis backs up IMRG forecasts that a huge growth in online shopping is expected. Data Analysts, Jupiter Research, predicted in December 2003 that the largest leap would occur in online shopping penetration this year, rising to 49% from 44% last year (see Half Of Western European Net Users To Shop Online By 2004).
However, the largest rise in average spending is not expected to occur until between 2007 and 2008, when Jupiter forecasts the online shopping market to be worth £65 billion. According to a survey by Taylor Nelson Sofres, the current average spend on web purchases is £86 a month with men spending more than women, averaging £95 per month compared to £78 per month.
As the internet makes it easy to find and compare what’s on offer, consumers have never had greater access to a wider range of products, shopping convenience or best value for money, says IMRG Senate. The group’s main areas for concentration this year are satisfying customer experiences and catering for the rapid growth expected.
Other challenges being faced are e-mails blighted by spam and viruses, delivery of products and the surrounding legislative framework. IMRG said: “The delivery of physical products is being described as the Achilles Heel of e-retail.”