The Growth of Internet Shopping
How the Web Is Affecting Purchasing Trends
A recent report, carried out by the British Council of Shopping Centres, discovered that while many British adults expect to spend 40 hours doing Christmas shopping, they could do the same chores online in just 10 hours.
By 2015, it’s forecast that online sales will account for 11% of total retail spend, and in some sectors such as music and video, Internet spending will be almost 50% of total retail spend by 2015.
This will take a bigger chunk of existing and future sales from physical retailers. But what can retailers do? Some suggest that they could advertise their shops more clearly and communicate directly with their customers.
Other ideas include giving discount vouchers with targeted and relevant communication to individual consumers. But there’s no doubt they will have to battle it out with online shopping websites and supplement their physical sales with internet sales.
Impacting the Economy
Online shopping trends have an indirect impact on the financial world too. Some analysts have forecast that retailers may have less need for physical shops if they’re selling more online. This could have implications for pension funds, insurance companies and property companies, which are the owners of Britain’s biggest shopping centres.
One huge advantage that physical shopping has over online is that shopping is considered a social activity. Some shopping centres, such as Bluewater and Lakeside, have become popular attractions for families to enjoy a day out.
Year-On-Year Growth for Online Shopping
Online sales are the fast growing mechanism for businesses to generate revenue. In the 10 weeks leading up to Christmas in 2005, online sales totalled £5bn, up from £3.33bn during the same period in 2004, according to the Internet Media Retail Group (IMRG).
Around 24 million people shopped online last year, indicating shopping online is trusted and accepted by UK consumers. The IMRG forecasts that e-shopping will rise again this year, estimating growth by over a third.
The Internet – a Trusted Source?
Payment over the internet has become more secure and trusted. Key payment systems, such as Paypal, TradEnable and Mondex, make consumers feel less exposed to risk using their methods of payment. An overall trust in the actual products sold on the internet can be further increased by branding.
Products from companies such as Apple, Sony and Dell all have strong brand followings and internet sales for their products are high due to this brand trust and reliance.
Some suggest that recent adopters of the internet will be less proficient at searching for product information and will rely on brands, but as they gather more experience, they will rely less on brand and more on the actual product. However, a captive audience can be developed with a strong brand and associated product.
People may be seeing the first signs that the internet is impacting not only on high street sales, but also the inclination of retailers to expand their real world outlets. Each year adds to the feeling that the original dot-com boom hype wasn’t so much wrong, as simply too early.
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