Retailer investment and low cost broadband lift online growth to five year high
When e-Retail was in its embryonic stages, many traditional retailers perceived the channel as more of a threat than an opportunity, but as the scale of the opportunities from developing an online operation became apparent, many have wholeheartedly embraced the Internet. Argos has arguably made the most significant strides of any retailer in the UK on this measure. It has successfully leveraged the benefits of both its channels to deliver a compelling multichannel proposition evident from 16.4% of its sales ordered or reserved via the Internet and a further 8.1% via text and telephone. A number of other retailers are introducing initiatives to advance the integration of these two channels including PC World, Currys and Jessops which have all introduced order online and collect in-store services for customers...
Some key findings
The UK e-Retail market grew at its fastest pace for three years in 2006. Despite years of quick growth, there is no sign that the online boom is set to end. In 2006, online retail spending grew by 33.4% almost 13 times faster than the retail sector overall to a record 10.9bn. This pushed the sectors share of total retail spending to 4.0%, a 0.9 percentage point jump on 2005.
Average annual spend per shopper which reached 606 in 2006, an 8.2% year-on-year advance. As shoppers have become more confident with using the Internet and retailers reputations for reliable deliveries have improved so too has the number. However rather than being driven by customers spending more each time they shop, spend has grown because consumers are shopping more often.
Electricals is both the largest online subsector and has achieved the fastest growth rate in 2006. Online sales of electricals grew by an impressive 41.4% to 2.8bn over the year to account for 11.6% of all spending on electricals.