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Online shopping set to grow by 50% over the next five years, says Verdict study, in the week that ONS figures show 22.5% ecommerce growth for August alone

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Online shopping set to grow by 50% over the next five years, says Verdict study, in the week that O
Online shopping set to grow by 50% over the next five years, says Verdict study, in the week that O
Online shopping will be worth £50bn a year by 2018, when one in every seven retail pounds will be spent over the internet, a new study has claimed.

That means ecommerce growth of almost 50% over the next five years, according to Verdict Retail.

The study came as figures from the Office for National Statistics estimated that online shopping grew by 22.5% during August 2013, while total retail sales rose by 2.1%, both compared to last year.


The Verdict study suggests that the fast growth it predicts over the next five years will be driven in part by the enjoyment that shoppers take in shopping over the internet. Only 4% of the 10,000 online shoppers who took part in its research back in March said they thought physical shopping was more enjoyable than online shopping. In its study produced eighteen months ago, that gap was 25%.

“Rather than push online spend outdoors, the rapid adoption of touch screen tablets and smartphones has moved online shopping into the living room,” said Verdict lead analyst Patrick O’Brien. “Sixty seven per cent said they shopped from their living room, indicating that second screening – browsing websites while watching TV – has had a major impact.

“This, together with the ability to browse of smartphones wherever you are, and social media, has made online shopping a much more immersive and interactive experience than it was only a few years ago, when more shoppers tended to be restricted to desktops typically located away from the living room.”

Verdict suggests physical retailers now need to give customers a reason to visit their shops, whether that’s improved service, events, or other attractions – particularly if they want to entice in the male and the 35-54 year-old groups, who find online more attractive than physical stores.

The study, says O’Brien, also puts to rest the “myth” that showrooming customers are using their smartphones instore to buy from rival retailers. It says only 2% of online shoppers have bought while at a retail premises, with some 97% doing so at home and 15% at work.

“Rather than making consumers agnostic about where they make their purchases,” he said, “smartphones and tablets are used in stores mainly to check prices and product details.”

However, the findings, illustrated in a Verdict infographic, are at odds with those of Omnica, published last week, which found one in 10 consumers had bought from one retailer online while standing in another retailer’s premises.

Commenting on the Verdict research, Shingo Murakami, managing director of Rakuten’s Play.com, said: “Shopping has always been a form of entertainment and this is becoming more apparent as the technology that supports online shopping improves and develops.

"For many years retailers have struggled to bring the personalised and engaging experience of the bricks-and-mortar shop on to their website, but the balance is now shifting with the digital experience rivalling and sometimes even surpassing the in-store. With Christmas on the horizon, retailers will need to go the extra mile to ensure that the Christmas shopping list doesn’t become a chore - providing a fun and fulfilling experience will be the key to encouraging customers to return in 2014.”

Meanwhile, this week's ONS Retail Sales bulletin for August 2013 estimated that online spending grew to £579.6m during the month, representing some 9.7% of all UK retail spending. Around 3.2% of food shopping took place online.

But while year-on-year growth in total retail spending grew by 2.1%, month-on-month retail spending fell by 0.9% compared to July when that month’s heatwave encouraged shoppers to visit the high street.

While the level of online growth seems striking, the ONS Retail Sales report for August, “it should be noted that internet sales were unsually low in August 2012 as feedback suggests consumers watched the Olympics and Paralympics instead of shopping online.”

Commenting on the ONS figures, British Retail Consortium director general, Helen Dickinson, said: "While not quite on a par with an exceptional July, these are strong figures well above the annual average and are sustaining the positive momentum we've seen in recent months. August saw retailers preparing well for the shift towards Autumn and customers responded well to back-to-school offers as well as promotions on late summer stock.

"Alongside improving consumer confidence, a fourth month of shop price deflation and rosier news in the wider economy, this is further validation for the cautious optimism sensed by many at the moment."
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