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Home shopping to account for around a third of all sales
Archived article dated Wednesday April 9th 2008
The home shopping market will account for around a third of all retail sales in the UK, with the Internet accounting for around 30% alone according to a new report.
Key Note believes that the market for home shopping will continue to expand at a rapid, albeit decelerating pace over the next 5 years.The expansion of e-commerce and, in particular, the Internet, will be the key factor driving overall growth in the home shopping market for the foreseeable future. It is possible that the general mail-order sector will completely converge with the Internet by 2012, while direct sales are likely to begin to decline. Even so, many consumers continue to regard shopping as a leisure activity and also enjoy the opportunity to buy some goods, such as clothes, personally so that they can try them on. This will inevitably limit growth at some point. Another factor which may come into play is the environmental one - it is clearly less harmful to have one van delivering goods to a number of people, than to have individual vehicles travelling to and from the shops with their purchases.
The total market for UK home shopping was valued at an estimated £58.34bn in 2007, more than double the £28.02bn spent in 2003. However, these figures conceal the widely diverging fortunes of the individual sectors. While the e-commerce sector has exploded, the general mail-order sector has experienced a sharp decline and the other two sectors are growing at only a sluggish pace.With the Internet now claiming around 18% of total consumer spending, even if, 5 years ago, the figure would have been negligible, the rising broadband penetration in the UK will only drive market growth further. Technological factors - such as the growth of broadband - will boost demand for e-commerce, while the major grocery retailers are expected to expand their home shopping services across much of the country.
As a result of concerns over security and the need to continually invest large sums of money in websites, logistical services, such as customer support, etc., the largest retailers will increasingly come to dominate the e-commerce sector. The general mail-order sector is overlapping more and more with the e-commerce sector, and the direct selling and direct marketing sectors are also coming under increasing competitive pressure from the growth of the sector.
Tagged as: key note | home shopping
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