The latest figures from the IMRG Capgemini e-Retail Sales Index indicate that online shopping is up in the UK despite the credit crunch.

Headline figures are as follows:
Online Sales in the first half of 2008 - £26.5 Billion
Online Sales in the first half of 2007 - £19.2 Billion

That’s an increase of 38% and means that online sales now account for 17p in every Pound spent. Analysts are very bullish as they see 20% as a tipping point which will force many high street retailers to re-think their strategies. This in turn may lead to further growth in online sales with Mike Petevinos (Head of Consulting for Retail for Capgemini UK) bullishly predicting that online sales will account for 30-50% of all retail within 5 years.

What are the drivers? Well everyone is citing everything from the credit crunch to fuel prices to carbon footprints! Whatever the drivers it is clear that many traditional retailers will be taking a close look at the online channel and assessing the online competition.

This looks like good news for the consumer as the price transparency that is implicit to the online channel should mean better value for the shopper. This in turn may however have significant implications for the retailers and manufacturers as larger e-Tailers throw their weight around (as seen recently in Amazon’s tough stance with Bloomsbury publishers) and the distribution channel status quo is challenged. Tough market conditions combined with increasingly saavy online shoppers and sophisticated competitors will mean that any businesses that want to compete online will have to raise their game.

This entry was posted on Monday, July 21st, 2008 at 4:19 pm and is filed under General Chatter. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.