Online shopping keeps growing

Retailers will need to take advantage of the growing online shopping trend

Online shopping grew by 19 per cent year on year in January, demonstrating the increasing importance of e-commerce to high-street retailers, according to the latest IMRG Capgemini e-Retail Sales Index.

Despite a spending dip for the second consecutive month after the Christmas shopping surge, the Index shows an increase from the average 15 per cent growth seen during the second half of 2008.

With sharp markdowns in the high street and a drag on businesses’ pricing power – the Consumer Prices Index (CPI) measure of inflation is set to fall from 3.1 per cent to about 2.7 per cent in December – traditional retailers will be under further pressure to improve their web offering to survive during the recession.

“Our January results show that consumers are increasingly seeing online as the place to shop in the current environment, with year-on-year growth of nearly 20 per cent for the month,” said Mike Petevinos, UK head of consulting for retail at Capgemini.

“So what does this mean for retailers? The strong performance of online points to a continued need to invest in the development of their e-commerce propositions,” he said.

“The question is whether bricks-and-clicks retailers can prioritise this sufficiently above the defensive strategies needed to combat tough high street trading. If not, the risk of widening the gap versus their pure-play rivals will be inevitable.”