UK online shopping to reach £30bn by 2013

Online retailers will have to work harder

UK online spending will rise to more than £30bn within the next four years, despite increasing competition in the segment, according to research.

While e-retail spend is set to reach £2.4bn this year, the figure is expected to reach £31.2bn by 2013, the equivalent of a 10 per cent slice of the total retail sector, says the report by Verdict Research.

The report adds that e-commerce is “the golden opportunity” for UK retailers and provides a recession-proof tool to facilitate growth.

“The key for individual retailers is to formulate two clear strategies: one for succeeding through the recession and one targeting growth beyond this, as the online channel begins to approach maturity,” said Malcolm Pinkerton, senior retail analyst at Verdict Research.

The total retail market is predicted to contract by 0.6 per cent this year, but the online market will grow by 13 per cent and people will spend even more on the web.

“Those with less money to spend are turning to the internet to search out bargains on branded items such as electricals,” said Pinkerton.

“Additionally, the more affluent groups, who do still have money to spend, continue to appreciate the internet for its convenience, making the channel doubly resilient to the downturn,” he said.

However, more competition and overall market maturity means retailers will have to work harder on providing a better customer experience online.

“With the expansion in market capacity slowing, retailers are inevitably going to find themselves having to compete much harder against their rivals in order to achieve the same levels of growth that they have previously become accustomed to,” said Pinkerton.

“Success will depend on a company’s ability to create ‘retail theatre’ and a consistent shopping experience across all channels, with highly differentiated, targeted, propositions heightening the consumer experience,” he said.

“In addition, retailers will need to become more adept at using technology and unfailing at implementing innovations on their web sites.”