UK spends record £4.5bn online in January

Sales season sees spending soar

Ian Williams, vnunet.com 21 Feb 2008

Online spending in the UK reached a record high of £4.5bn in January, according to the IMRG Capgemini e-Retail Sales Index.

The figure suggests that every person in the UK spent £74 online during the month, a year-on-year increase of 75 per cent.

Popular items were electrical goods and clothing, which saw the highest year-on-year growth of 38 per cent and 32 per cent respectively.

The Sales Index also showed 9.8 per cent growth in the sales of beers, wines and spirits, and a rise of 18 per cent on health and beauty products.

"The index shows that January sales are as large a phenomenon online as they are on the high street, and that the overall online market continues to show strong growth," said Anthoula Madden, vice president of consumer products and retail at Capgemini UK.

"The high growth in electricals and clothing suggests that much of this spending is being driven by shoppers treating themselves to the items missing from their Christmas stockings.

"The continued growth in the online sector underlines the importance to retailers of understanding and serving customers across all channels."

According to the report, the growth in sales volume over the last three months is more than double the same period last year and is at the highest level since January 2003.

The overall e-retail market is growing as more retailers enter the online market, but the high growth is still concentrated on the bigger players which are capturing consumers' hearts and minds.

This observation is backed up by a recent survey by e-commerce specialists Avail Intelligence, which found that 84 per cent of online shoppers trust only a handful of sites when buying goods.

Almost half of internet shoppers browse between 10 and 20 sites before making a purchase, but more than three quarters buy regularly from just five or fewer trusted sites.

"Today's e-commerce customers expect more from sites than cheap prices and home delivery," said Rolf Elmér, chief executive at Avail Intelligence.

"Tailored searches, related purchases, personalised recommendations and trusted reviews of products are essential to the buying decision.

"If the products do not match their preferences, shoppers will quickly move on. The critical goal for any e-tailer is to get into a shopper's site shortlist and stay there."

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