Money being spent online on consumer goods is increasing rapidly and in the UK has grown at its fastest rate since the dotcom crash. The results come after retail analysts Verdict Research claim that money spent for consumer shopping online increased by 33.4% to £10.9 billion from last year. Verdict also sees these online sales tripling over the next five years.
One of the reasons for this increase is that far more people now have broadband in the home which gives greater and more efficient access to online shopping. With fewer overheads than traditional bricks and mortar shops, online retailers are able to sell goods at far lower prices which is attracting a greater volume of shoppers.
Verdict believes that by 2011 online retailing will account for 8.9% of the UK’s retail sales. However they believe that the greater part of this rise will be existing buyers spending more online as opposed to a big intake of new customers.
This will put heavy pressure on high street stores who have already seen a drop in profits this year. Some high street stores have already attempted to enter the online craze, such as Ikea and Waterstones. However many retailers seem reluctant to increase their online presence, as they wish to increase the drive to their stores
There is still a big worry about web security, which is preventing more customers from buying online. The report reflected on this, “As shoppers spend increasing sums online they need greater assurance that their financial details are safe, particularly in light of the growing number of 'phishing' scams, where customers have in error divulged personal financial information to third parties,".
Total online spending • 1997 - £100m • 1998 - £400m • 1999 - £1bn • 2000 - £1.8bn • 2001 - £3.2bn • 2002 - £3.8bn • 2003 - £5bn • 2004 - £6.4bn • 2005 - £8.2bn • 2006 - £10.9bn Source: Verdict Research