RSS feedsOnline sales are reaching new peaks, providing retailers with a welcome counterweight to the economic uncertainty affecting high-street spending.
Marks and Spencer seen as a bellwether for the sector saw a 2.2 per cent drop in Christmas sales, but web sales were up 40 per cent. The pattern was mirrored by a number of other big names such as Sainbury's and Domino's Pizza.
Technological advances are a factor in the accelerating growth of online shopping: cheaper, faster broadband and better security is boosting customer confidence, say experts.
“There is more personalisation, web sites are faster and save time by making relevant recommendations in short, the experience is simply better,” said retail analyst Martin Atherton at Freeform Dynamics.
And fears of economic instability are sending shoppers to the web for choice, convenience and better prices.
Unsurprisingly, retailers are following the money. Some 72 per cent had a web site in 2007, up by 21 per cent from the year before, according to research from Deloitte.
Internet-only market leaders are also benefiting. Amazon had its best Christmas ever at its peak on 10 December the site sold nearly one million products in the UK alone, equivalent to 11 orders per second.
Online sales have taken time to take off because of a disconnect between web site and warehouse, said Atherton.
“Issues such as stock management and logistics have spoiled web sales in the past couple of years, but physical processes and sales are slowly converging,” he said.
Delivery is still a major challenge. One option pursued by PC World and Argos is to allow customers to order online at a lower price and collect the items themselves.
The rise of internet shopping is only just beginning, said James Roper, chief executive of e-retail group IMRG. “The web is the new market place,” he said.
“Although demand still outstrips supply and a great deal of items are not yet available, that is rapidly changing.”
Seasonal ups and downs
Marks & Spencer: Web transactions via M&S Direct were up 78 per cent thanks to a site relaunch earlier in the year. Overall sales were down 2.2 per cent.
Sainsbury’s: Overall sales in the last quarter of 2007 grew 3.7 per cent, but online sales rose by 40 per cent. The run-up to Christmas saw 90,000 web orders, more than 50 per cent higher than last year.
Next: High-street sales were down 0.3 per cent in the last six months of 2007, while the web business grew by 2.2 per cent.
Lush Cosmetics: Overall sales grew five per cent year on year in
December 2007. Internet sales doubled.
John Lewis Partnership: Sales grew 7.6 per cent in 2007. In December, its Direct web business posted sales up 40 per cent on 2006.
Domino’s Pizza: Total online trading for 2007 hit £32.3m, up 61 per cent. The web site represents about 15 per cent of all the company’s sales and average spending is 20 per cent higher online than for telephone orders.
