Spring 2008

Home shopping could account for a third of all retail sales within five years, according to a new report from consultancy Key Note. It says home shopping already accounts for 18 per cent of retail spending - a somewhat higher proportion than quoted by other analysts.

Key Note includes catalogue and direct retail in its figures as well as internet shopping, but adds that internet sales alone will account for 30 per cent of the home shopping total in 2012. In fact it predicts that other forms of home shopping will decline as the internet strengthens its hold.

It reckons the total market for UK home shopping was worth £58.34 billion in 2007, more than twice the £28.02 billion figure for 2003.

The largest retailers will increasingly come to dominate the e-commerce sector, Key Note says. It thinks this will result from concerns over security, and from the need to invest large sums of money in web sites and logistical services such as customer support. 'The days when a web site such as Amazon or eBay could emerge and develop into a huge multinational concern may be over.'

The marketplace is fiercely competitive, Key Note says, with companies investing huge sums to ensure that their web sites are easy to use, so as not to lose out to the vast number of online competitors.