Autumn 2008

Online retailing appears to be holding up reasonably well in the face of the recent turmoil in financial markets. Whilst expectations were that the recent apparently unstoppable growth might falter, pundits generally seem to think concerned consumers are more comfortable shopping online than in retail stores.

An example is the recent performance of catalogue and online retailer N Brown, whose sales in late September/Early October were reported to be up nearly 12 per cent. In its annual results, N Brown says its online sales were up 57 per cent over the previous year, and rose to 21 per cent of total sales. It runs 42 web sites in total.

In a major IMRG survey conducted in September, 68 per cent of shoppers said that they were more likely to shop online for Christmas presents this year, and 77 per cent of shoppers planned to carry out about half or more of their Christmas shopping online (in 2007 it was 56 per cent). Fifty-eight per cent of respondents planned on starting their Christmas shopping earlier this year to spread the cost.

IMRG, the online representative body, admits there has already been some slow-down in online sales. It says year-on-year growth in August was down to 15 per cent – half that of the previous year. But that statistic should be set against minimal growth in high-street retailing. In other circumstances it would still seem a striking increase.

 

It appears that the UK experience does not for once mirror that of the United States, where some analysts suggest that online sales could slip in the face of possible recession. There are reports that four biggest home shopping businesses could see some decline in revenues compared with last year, and a Mintel researcher has described home shopping as 'a discretionary purchase.'

Against the background of uncertainty caused by the financial storm, it has hard to know what weight to give even quite recent analysis of the home shopping market. At all events, predictions have continued to run high.

The value of online retail sales is expected to soar from £20 billion this year to as much as £50 billion by 2012, according to a new survey by PricewaterhouseCoopers, for instance, at which time it will account for nearly 15 per cent of the total retail market.

And in a longer-range forecast, shopping comparison web site operator uSwitch has extrapolated on figures from the Office for National Statistics to reach some remarkable conclusions. Online shopping, already put at 19 per cent of all shopping, will rise to 40 per cent (worth £163 billion) by 2020, it says, and will exceed other forms of shopping by 2026.