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Home shopping transformed over last five years

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The nature of the home shopper has changed dramatically in the last five years, according to a new study.

Buying from home is no longer the preserve of the older shopper, leafing through mail order catalogues and sending off their forms, according to the Transactis Home Shopping Index, which has analysed web and mail-order sales between 2006 and 2010. Instead, younger people are now much more likely to purchase from home – but via the internet, while older shoppers’ use of home shopping has fallen in recent years.

The index, which focuses on consumers buying clothes, homewares, for children, gadgets and home furnishings through catalogues and websites, shows the growing importance of the internet to the home shopping market over the last half decade. While 21% of home shopping purchases were made over the internet in 2006, that figure had risen to 51% by 2010.

Online spending rose by a dramatic 173% over the five years of the index, but total spend across home shopping channels was up by a more modest 14%. In 2010 alone, home shopping sales were down by 0.9%, the study from customer insight firm Transactis found, compared to the previous year – with catalogue orders falling away as online sales grew quickly.

But, said Michael Green, director of insight at Transactis, this is not evidence of a simple shift from catalogues to online. Rather, he said, there’s been a change in the home shopping demographic. Between 2006 and 2010 the amount of money 18 to 24-year-olds spent online rose by 1,076%, while 25 to 34-year-olds spent 314% more. At the same time, total catalogue and online spending by consumers aged 45 or more fell.

“To say there has basically been a linear shift from mail order to web shopping is too simplistic,” said Green. “What we have seen is massive growth in home shopping by younger consumers, as those under 45 have vastly boosted their home shopping spend over the last five years and adopted the internet as their primary purchasing point.

“Meanwhile, those aged 45 and over are spending less overall on home shopping – the total spending among the over 75s contracting by nearly a third over the five-year period – but spending more on the web.”

The study also found the growth of online shopping starting to level off as multichannel retail becomes the norm. The speed at which ecommerce is growing slowed to 8% in 2010, according to the index. That’s down from growth of 20% in 2009, 35% in 2008 and 58% in 2007. The figure is taken from the actual transactions of 39m customers buying across 205 home shopping brand. The trend for 2011 is, however, somewhat bucking that downward pattern, with growth of 14% recorded in the first two quarters of 2011.

But, according to Green, catalogues still have an important part to play in the multichannel mix. “Many retailers have also found that cross-channel print activity – catalogues, flyers, brochures – has helped establish their brands in the minds of consumers and prompted home shoppers to go online to make purchases. This sort of cross-pollination is one of the main reasons why multichannel consumers are bigger spenders.”

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