Social media, blogs and affiliates are aiding retailers in online sales

Dr Jonathan Reynolds

Received wisdom would have us believe that if there is a type of retailing that is surviving, if not thriving, in this recession, it is online.

In the UK, headlines suggest that savvy consumers have abandoned the high street and have taken to the internet in droves to take advantage of cheaper prices and cut-throat competition.

However, while UK online sales have been consistently stronger than store-based sales over the past few months, they have been growing at only one third of their rate in December 2008.

In the US, the position is even worse: online retail sales fell year-on-year by 4.9% in the final quarter of 2008 after a decade of continuous growth – albeit at half the rate of conventional store sales, which fell by 8.6% over the same period (Figure 1).