Retail industry online storms ahead of recession
Online spending has increased growing by £2.4 billion in 2009 despite the current recession.
The report released by Verdict Research expect to see online spending by consumers on retail purchases rise by a substantial 13.3 per cent to £20.9 billion.
This growth is in vast contrast to the total UK retail market which is suffering a historical decline.
Despite the Internet slowing down and the market becoming more competitive the report, ‘UK e-Retail 2009′ predicts that online retail is set to reach £31.2 billion by 2013, accounting for 10.0 per cent of total retail spending.
Malcolm Pinkerton, Senior Retail Analysist at Verdict Research and author of the report, said, “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.”
However, in 2009 total retail growth will contract by 0.6 per cent as consumer spending is hit by the gruelling recession.
The online market, on the other hand, will continue to grow over the course of the year, driven by continued increases in the number of Internet shoppers and higher expenditure per head.
This growth is following a trend seen in 2008 when there was a 1 per cent increase in Internet users to 34.4 million and an 18.1 per cent increase in online shoppers to 26.7 million. Each of these individuals spent an average of 5.8 per cent more in comparison to 2007.
One of the driving forces sending people online is that Internet prices are generally cheaper than they are in physical stores and shoppers are more easily able to search for bargains, including second-hand goods.
This growing craze of Internet shopping is most popular with the more affluent and therefore more resilient AB shopping class. For this increasingly time-pressed group, making effective use of their limited leisure time is of the utmost importance. In fact, Verdicts reports stated that the AB group is now responsible for a massive 56.8 per cent of all online spending.
“Those with less money to spend are turning to the Internet to search out bargains on branded items like electricals,” said Pinkerton.
“Additionally the more affluent groups, who do still have money to spend, continue to appreciate the Internet for convenience, making the channel doubly resilient in the downturn.
“There is some evidence that the most financially squeezed shoppers are abandoning the internet in favour of cheaper high street shopping at the likes of Primark, Matalan, Poundland and the grocers, particularly in sectors which retail smaller, lower priced items, such as homewares, DIY and clothing.
“But overall this is being more than outweighed by increases in bargain hunters looking for larger, branded items and the loyalty of those most financially comfortable consumers who continue to value convenience over price.”
For more information about the 2009 report visit Verdict
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