Online shopping growth tempts high-street retailers

Online shopping sales grew 30 per cent last month, figures published this week show.

The increase is the biggest in the last seven months, tripling from 13.4 per cent in February to 29.3 per cent in April 2005, according to figures from the Interactive Media in Retail Group (IMRG).

The same research shows that, although overall sales across all retail channels were fairly flat - down 0.1 per cent compared to April 2004 rates - online growth came at the expense of the high street, which fell 4.2 per cent and was down from a slight 2.9 per cent rise this February.

Nick Gladding, senior analyst at retail researcher Verdict does not, however, believe the figures will encourage retailers to increase investment in ecommerce strategies and technology.

'A retailer facing intense competition on the high street in unlikely to invest online,' he said. 'They still see it as too risky.'

There is also a fear that investing more in an online presence will only cannibalise existing high-street sales at the expense of overall sales growth, Andrew McCelland, IMRG development director told Computing.

'But there's more risk losing sales to the competition who do have e-retail strategies,' added McClelland. 'This is particularly the case when you realise it is time-poor, cash-rich consumers that are more like to shop online.'

Gladding points out that while 'physical retailers are still pursuing online strategies', in today's difficult trading conditions those companies are also more likely to concentrate on 'shoring up their customer base and making their existing shops work harder'.

And McClelland adds the cost of ecommerce cannot simply be counted in terms of the cost of customer-facing, front-end ecommerce investment.

'It really depends on the individual retailer, but with most e-retail is moving into the realms of traditional retailing now.

'Integrating the e-retail option means guaranteeing the same quality of service to the customer for the products they want, at a price they want. To do that you have to ensure the quality of your back-end systems and how well they integrate with your online environment,' he said.

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