UK eCommerce stores reported record sales for the 10 week period leading up to Christmas 2005

Internet shopping increased by a huge 50% over 2004. Figures published by the IMRG (Interactive Media in Retail Group) show that eCommerce just keeps growing and growing. Shoppers spent almost £5 billion online, up from £3.3 billion for the Christmas period 2004. 24 Million UK shoppers bought online, spending an average of £208 each, over Chrstmas, and an average of £816 over the year.

Anyone getting Deja Vu here? Seems like a similar report was made last year. And the year before. The IMRG predict sales to grow a further 36% in 2006, worth £26 billion for the year, and 2006 will be the first year where average user spend will top the £1000 mark.

How is this level of growth possible? It can only come from a combination of 2 things:

  • people spending more money on shopping as a whole
  • shoppers choosing the internet over the high street

Why are so many shoppers forsaking the bricks and mortar, and choosing to buy online? Firstly, consumers have confidence in online stores. Why shouldn't they? Having made several purchases with no problems, the previously alien process of online shopping is familiar and comfortable.

eCommerce stores have improved as well. MicroAngelo works on the principle “make it easy for the customer to complete a purchase”. Recently, after receiving a play.com newsletter in my inbox, I purchased a DVD in a matter of seconds (all my details are already in the play.com database, as an existing customer). A couple of clicks and it's done. Coupled with the fact that the price is significantly cheaper than the high street, and includes delivery, play.com recorded a 37% rise in music sales, while HMV shares dropped after it reported a slump in Christmas sales, blaming both online retailers and supermarkets. Boots.com reported a 40% rise in 3rd quarter sales. Amazon.co.uk also had a record breaking Christmas season, reporting some truly astonishing figures, including on it's busiest day:

  • 256 tonnes of goods sent out
  • a Royal Mail truck leaving one of the 3 Amazon distribution centres every 15 minutes
  • 41 items purchased every second, a total of 3.6 million items sold

The spread of broadband has had a huge influence on the popularity of online retailers, and this also sets to increase in the coming years. As more and more people move up to high speed internet connections, and the bandwidth increases, high quality streaming video, 360 degree virtual tours, and larger, higher resolution images of products will reduce the desire to see something “in the flesh”, still felt before purchasing certain items.

The companies that reaped the largest rewards from the increase in online shopping were those that planned ahead and invested in professional, bespoke eCommerce stores and high profile internet marketing campaigns, coupled with offline website promotion. A proviso though - some companies' websites were so successful they couldn't meet demand, such as Fortnum and Mason, who were unable to deliver all promised orders by December 24th after sales surged 75% over 2004 figures. Make sure you have the infrastructure and capacity to meet the demand.

If you have an eCommerce website and you're thinking “Why isn't my site as successful?”, or if you have yet to incorporate an online store into your business, let MicroAngelo help you to claim your slice of the ever growing online pie - contact us today.

14th February 2006

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