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Transatlantic surge of online shopping

News, 26 January 2015

LONDON/NEW YORK: Further evidence of the rapid rise of online shopping on both sides of the Atlantic has emerged in a new report, which also highlighted that pure play retail, not omnichannel, was the big winner of this trend.

Wipro Digital, a digital solutions company, conducted a post-holiday survey of 2,023 online adult consumers in the UK and the US and found that a significant majority in both countries did more than half of their 2014 holiday shopping online.

Close to three-quarters (71%) of British consumers did so last year, up from 45% in 2013, while 61% of American respondents said the majority of their holiday shopping was conducted online, up from 36%.

Furthermore, this trend is set to continue, the report said, with half of respondents in both countries reporting that they planned to do more shopping online during the holiday season in 2015.

By contrast, a mere 6% of consumers in the UK, and just 4% in the US, said they planned to increase their in-store shopping with bricks-and-mortar retailers.

Consumers also spent more online during the 2014 holiday season, the report found. UK consumers spent an average of £292 online compared to £179 in-store, while online purchases in the US averaged $400 and it was $302 in-store.

"Consumers continue their steady march online, finding few reasons to shop in-store rather than online for their holiday shopping," said Avinash Rao, global head at Wipro Digital.

And in a warning to retailers who rely on an omnichannel strategy, he added: "Even online, omnichannel retailers are losing customers to internet pure-plays. Bricks-and-mortar retailers are having difficulty delivering on the benefits of omnichannel retailing."

Supporting this assertion, the survey revealed that 44% of UK consumers and 47% of US online shoppers carried out more than half of their online shopping with pure play retailers.

A quarter said they do not even consider the websites of bricks-and-mortar retailers while more than half have not visited manufacturers' direct-to-consumer sites.

Greater convenience, better prices and ease of use were the three main drivers for this trend, although online pure play retailers did come unstuck by consumers' concerns about their delivery costs and reliability.

The survey said 16% of UK and 11% of US online shoppers did not receive their purchases in time for the holiday while nearly half hoped not to pay shipping charges in 2015.

Rao advised bricks-and-mortar and omnichannel retailers to focus on customer interactions and the benefits of the in-store experience if they are to counter the trend of consumers increasing their spending with pure play online retailers.

Data sourced from Wipro Digital; additional content by Warc staff