Broadband has again been fingered as the major driver in the continuing growth of online shopping in the UK.
With ever greater levels of take up in broadband connections, internet shopping sales are now predicted to grow by 40 per cent in 2007. The Interactive Media in Retail Group (IMRG) are predicting that online shop sales will rise to £42 billion this year, up from £30 billion in 2006.
Their forecast has been supported by other data from the Office for National Statistics (ONS) which shows that till receipts by non-store retailers, including internet firms, jumped by 2.5 per cent last October.
At the moment, some 10 per cent of all retail sales are made on the web, but this could rise to as high as 20 per cent within the next three years. Certainly, greater take up of broadband, in part due to various ‘free’ broadband offers from mobile phone companies, is responsible for the continuing growth.
Though the biggest gainers in this shopping revolution are the big name retailers, there are still significant business opportunities for small to micro-sized companies to carve a slice of the market. With greater acceptance of online shopping and the falling cost of broadband connections, the benefits undoubtedly filter down to smaller companies because purchasing on the web is becoming such an everyday task. Greater numbers spending online should mean, in most cases, more business for everyone with a web presence.
Certainly, the ritual splurge before December 25 saw UK internet retail sales hit a monthly total of £3 billion for the first time as the public reaffirmed their desire to shop on the web. IMRG estimates that £3,260,000,000 was spent online during the month, at an average rate of £4.57 million per hour, approximately 45 per cent (44.7 per cent) more than in the same period last year.
November's internet sales were also more than half a billion pounds higher than those of the previous month, when the IMRG Index recorded a value of £2,729 million for October. This increase was ten times the average monthly increase of £50 million recorded during the first ten months of 2006. During the same 10-month period two years ago, in 2004, the average growth rate was just £16 million per month.
IMRG's CEO, James Roper, commented: “Internet shopping is hugely attractive for consumers, especially at Christmas, as these figures show…Though no longer a surprise, growth of this magnitude is nevertheless breathtaking. In 2000, the first year in which the IMRG collected hard online sales data, Christmas trading was worth well under half a billion pounds, and we thought that was huge at the time. Now we can see that the e-retail market is just getting into its stride, with large potential for long-term growth.”
The challenge for small to micro-sized companies is in ensuring they maximize the potential benefits through the promotion and optimisation of their web sites.
