UK online retail will more than double over the next 10 years, but then a tipping point will be reached as the market matures and growth will slow to 6% a year.
That’s the prediction from the IMRG and Capgemini as they publish their 10th anniversary edition of the IMRG Capgemini e-Retail Sales Index. The two say that the UK e-commerce market will grow by 110% in the next 10 years, reaching £123bn by 2020.
In the future, the index predicts greater cross-border trading in Europe and beyond, while mobile commerce will be the “defining technological advancement of this decade”.
Chris Webster, vice president, retail consulting and technology at Capgemini, said: “The challenge for the next 10 years will be for e-retailers to increase their share of the market even further and come up with new ways to extend brand loyalty.”
The forecast came as the IMRG Capgemini e-Retail Sales Index revealed that more than £250bn was spent online in the last decade.
At the same time the IMRG/Hitwise Hot Shops List produced its 4th annual top 100, showing Amazon at the top of the list once again, while Argos stays in second place and Play.com in third place.
Of the 10 retailers in the top ten in 2006, seven are still there: Amazon UK (1/1), Argos (2/3), Play.com (3/5), Apple Computer (4/10), Tesco.com (5/4), Amazon.com (6/6) and easyJet (10/8).
According to the IMRG/Capgemini e-Retail Sales Index, in 2010 alone, sales are expected to reach £56bn, compared with the £1.8bn spent by six million online shoppers back in 2001.
Since it was launched, the index has grown by 5,772% and, says IMRG, we are now more likely to buy goods online that we never did, such as clothing, thanks to rich media imagery that allow shoppers to see clothes in detail and on models.
The index also reflects the UK’s wider economy, says the report, with growth running at 35% in boom-time 2006 but falling back to 14% during recession-hit 2009.
IMRG chief executive James Roper says: “Britons are passionate about shopping online. The combination of ease, convenience and 24/7 access is incredibly compelling. We expect to see that relationship strengthen over the coming decade and by 2020 we predict that the internet will account for half of all retail sales and influence most of the other half.”
Mark Binnington, marketing director at Boden said: "Boden first went online in 2001. It is fair to say that we were sceptical and as luddites ourselves felt that our customers would be to. We were very wrong. By 2004 we had taken over £50m demand online representing 40% of our business. We expected it to stop there. However, by the end of 2009 we had taken almost £200m demand online representing almost 80% of our business. And, it’s still growing.”
Peter Callaway, director of e-commerce at House of Fraser said: “Since the launch of the House of Fraser webstore we have seen growth in the online channel which significantly outstrips the overall growth reported by the IMRG Index as a result of being later to have an online presence. This growth continues as consumers become ever more confident in purchasing fashion online and see the House of Fraser webstore as an exciting and inspirational place to shop from the comfort of their home or to just research before visiting one of our stores across the UK.”