Fears that online shopping may have peaked in the US will not be replicated in the UK, say industry experts, but they are warning that businesses may have to adapt to the next generation of internet retailing.

The growth rate of e-commerce in the US is rapidly diminishing, according to figures from analyst Forrester Research, down from 25 per cent last year to 18 per cent this year.

Some items traditionally popular with online shoppers are set for significantly slower growth in the coming year. Books will only rise 11 per cent by the end of the year compared with 40 per cent last year, while clothing sales will increase 21 per cent compared with a hefty 61 per cent last year.

The figures may concern retailers that have invested heavily in web site infrastructure and supply chain systems to enable online sales.

But online retailing body IMRG is bullish about the future of internet shopping, and chief executive James Roper describes reports from the US as bizarre.

‘Online sales in the UK have been growing by 48 per cent for the past three months and you have to go right back to 2003 to find higher sustained growth,’ he said.

Roper believes growth will continue to accelerate for at least the next five years, fuelled by increased broadband penetration, improved online processes, and the addition of many products not yet available on the web.

But a next generation of online retailing is approaching, and retailers will have to adapt to a new business model to survive.

‘The online market will mature in a way that will surprise a lot of people – it will morph into something else entirely,’ said Roper.

The development of rich media content, interactive web sites and Web 2.0 initiatives will make online shopping an experience as compelling as shopping in-store, he says.

‘In many ways it will emulate and exceed the shopping experience of bricks-and-mortar stores,’ he said. ‘But the distinction between the two will disappear and it will become part of a single shopping experience for consumers.’

Tesco.com has already announced its intention to deliver a more interactive web site to appeal to a new generation of online shoppers. It has integrated Microsoft’s Virtual Earth program to allow customers to find their store on an interactive map.

The firm is also considering Web 2.0 technologies to get the community more involved with online shopping, says Tesco.com IT director Jon Higgins.

‘It is important to be responsive to trends and continually innovate if we are to retain our edge over online competitors, and one way to do this is to make the online experience more closely resemble the in-store experience,’ he said.

High-street retailer Marks & Spencer has opted to integrate its web, phone and in-store ordering platforms to reduce the distinction between shopping online and in-store and increase internet sales from £160m to £500m in the next few years.

M&S believes there is still significant room for online growth. ‘There is an opportunity because our market share of clothing online is much smaller than our overall market share, so there is clear space to grow,’ said a spokeswoman.

Jeremy Beale, head of e-business at employers’ body the CBI, says online shopping may not have peaked, but it could have reached a lull as next-generation web sites emerge.

‘Online sales have been rising steadily for a long time, so it is inevitable that it will plateau before something else happens to drive it up again,’ he said.

‘This could include the development of more interactive web sites or other factors such as increased broadband penetration and better security to encourage sales of higher-value items. There is also an opportunity in online sales from business-to-business, which is not at the level of individual consumer purchases, but is much more valuable.’

The British Retail Consortium (BRC) says a slowdown could be on the horizon as retail trends in the UK tend to follow those that occur in the US.

‘We just have to determine if the slowdown in the US market is caused by online shopping peaking or by a general economic slowdown,’ said a spokesman.

‘Many items bought online are luxury items and they are most likely to be the first affected when there is a slump in consumer confidence. So a slowdown in the UK could be the result of interest rate rises rather than a peak.’

The most successful retailers are those that tailor their services to match consumer demand, and online retailers must examine closely how the market is likely to mature and how they will be affected.

Where web sales are decreasing in the US

• Online sales growth is slowing in 18 of 24 reported categories, with some of the biggest slowdowns in sectors such as clothing and footwear (down from 61 per cent to 21 per cent), office supplies (48 per cent to 18 per cent) and pet supplies (81 per cent to 30 per cent).
• Just five categories show a rise in projected sales growth, with toys and games up from 11 per cent to 20 per cent, food sales rising to 19 per cent growth from a fall last year of eight per cent, and gift cards up from seven per cent to 24 per cent.
• Financial results from some of the biggest online retailers appear to support this trend. Web site sales at auction site eBay are said to have risen by a mere one per cent in the first three months of the year.
• Bookings from Expedia’s North American web site also rose by just one per cent in the first quarter, and the company is expanding the number of its physical outlets in the US.