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Online set to double its share of retail sales in UK before 2012
Archived article dated Saturday June 27th 2009
Online retailing is set to grow by over £12 billion to £21.3 billion by the end of 2012 in sharp contrast to high street sales that are predicted to decline by over £8 billion, according to a major report from PayPal.
The 'PayPal UK Online Retail Report', undertaken by Experian is a study into the future of online retail and its role during and after the current recession. It suggests that the massive online growth is driven by a new breed of 'considered consumers' who are heading online to find better value.
The report paints a picture of very divergent fortunes for the internet and the high street with the former expected to grow at a massive 137 per cent while the latter falls by 1.4 per cent by 2012. This will result in the online retail market doubling by 2012 with a market share moving from 3.2 per cent to 7.4 per cent of total retail sales.Carl Scheible, Managing Director of PayPal UK, says: “The value of online retail can no longer be dismissed as a sideshow. Its phenomenal growth is not only forecast to deliver sales of as much as £21.3 billion by 2011, but a £12.3 billion increase will also ensure that the entire UK retail sector is growing again by the end of 2011.
“The recession has been tough for many UK retailers as they deal with the slowdown and its knock-on impact on consumer spending. The improvements in online shopping will continue to drive consumers until they are spending one in every 14 pounds online.”
This major shift in consumers' shopping habits has led many people to say their online experiences are now preferable to in-store across key elements such as value and convenience. As many as 24 per cent of UK adults now believe that online shopping will become the norm and the high street will eventually die out.
But this does not necessarily mean they are satisfied with the online experience as over half of online shoppers believe that most high street retailers could significantly improve their websites and sales processes to enhance the customer experience.
“In our experience the retail winners from this recession will be those that work hard to meet expectations. If customers have come to expect fantastic service on the high street, retailers must make sure they aren't disappointed if they head online. Customers want good value, simplicity and security when they decide where to spend their money online,” says Scheible.
Tagged as: paypal | online shopping
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