Online retail sales rise in UK

26 January 2010

LONDON: Online retail sales climbed to a new high in the UK in December last year, but the "conversion rate" among web users in the country declined compared with the same period in 2008.

Based on figures from over 100 internet retailers, the IMRG Capgemini Sales Index found that revenues reached £5.46 billion ($8.8bn; €6.2bn) in the final month of 2009, up 17% on an annual basis.

Within this, however, just 5% of people visiting these websites went on to make a purchase, while 6.6% had done so 12 months previously.

Karen Howland, a retail analyst at Barclays Capital, said "people are becoming more savvy, using more comparison websites and doing the work themselves. The proliferation of websites you can shop on is so significant, why would you just go to one site?"

"The trend will inevitably increase as people become more comfortable with online, though it will be more common in electricals – where there are many suppliers – than in soft goods like fashion, where pieces tend to be more unique."

Companies with a presence on the high-street and the web saw sales improve by 13% month-on-month in December, while online-only operators posted a decrease of 8%.

Jon Parry, retail consultant at Capgemini, said "this shows both the high value consumers place on a multi-channel proposition, particularly when it comes to gift returns, and the trust advantage our high street brands have."

John Lewis, the department store group, registered an uptick of 20% in December, and Simon Dawes, head of merchandise and selection at its online arm, said the organisation benefitted from its offline strength.

“If you've got brand loyalty and customers who trust you, then they know what they see online, they'll get," he said.

IMRG Capgemini predicted that eCommerce sales would rise by 13% in the UK in 2010, compared with an expansion of 14% in 2009.

Data sourced from Financial Times; additional content by Warc staff