Broadband kills dial up and boosts online shopping

Dial up internet access is on the way out, with 56k modem connections falling by a third over the past year, according to new figures from the Office of National Statistics (ONS).

The decline is due to broadband uptake in the UK which now accounts for 64 per cent of the total UK market. Between December 2004 and December 2005, broadband connections in the UK grew by 59 per cent, fuelling greater competition among broadband providers who raised bandwidth speed, cut prices and offered added-value features to their access packages.

With the end of dial up in sight, some in the internet industry are predicting further price cuts this year and more mergers and ISP takeovers which could drive broadband prices to as low as £10 per month.

The ONS figures follow recent research that broadband will have the biggest single influence on online trading in 2006.

Fulfilment and distance shopping company, Zendor found that in a poll of more than 200 consumers, more than half indicated faster broadband connections as being the top factor in encouraging them to shop online. Other factors included improved delivery and better online security.

The need for improved delivery services and options is still prevalent, with many consumers demanding flexibility of delivery options in terms of timed slots and specified delivery days, as well as an overall improvement in reliability.

Online security, although cited, is less of an issue than it has been in the past, which suggests that consumer confidence in the Internet is growing. This could be due to effective 3rd party online fraud solutions being made available and campaigns, such as the Interactive Media Retail Group’s (IMRG) Internet Shopping is Safe (ISIS) mark, reassuring online shoppers. This increase in consumer confidence was further demonstrated by the huge rise in online shopping during the 10 week run up to Christmas 2005 when sales soared by 50%.

Angela Schorah, Marketing and Communications Manager at Zendor, comments: “As more and more consumers sign up to a broadband connection, the attraction of Internet shopping is becoming even more pronounced. Any retailers who have not yet developed a multi-channel or online strategy need to move fast if they are to embrace this shift in consumer behaviour and stay ahead of their competitors.”

Meanwhile, bill reduction site, uswitch.com is offering a broadband access deal comparison tool to help consumers choose the most suitable broadband provider. To produce a comparison table, users complete a short questionnaire to clarify their needs. There are then two ways to display the results, providers that allow users to switch online directly from the uswitch.com site and those that don’t. The latter option generates the biggest selection of providers.

The comparison tool can be used whether you already have a broadband connection and are considering changing provider, or are about to get broadband for the first time.