Online sales could rescue retail
Online retailers are riding to the rescue of the UK retail sector, and are set to post the only positive growth figures in the sector, according to research commissioned by online payment service PayPal.
UK online retail spend is forecast to grow by as much as £12.3bn, to £21.3bn, by the end of 2011. PayPal's report describes 2011 as offering “the first hope of a genuine post-recession era in retail”. At present nearly 9m adults shop online at least once a week; one pound in every 14 will be spent online by 2012 according to PayPal's predictions.
The PayPal UK Online Retail Report was undertaken by Experian. It predicts that online sales will increase by 137 per cent by 2011, while high street sales drop by £8.3bn.
The projected figures would see the online retail sector more than double its market share from 3.2 per cent in 2008 to 7.4 per cent by the end of 2011.
“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,” says PayPal UK managing director Carl Scheible.
“The recession has been tough for many UK retailers as they deal with the slowdown and its knock-on impact on consumer spending,” says Scheible. “Of course, many of the major high street brands have actually enjoyed the online boom, despite facing challenges in their own stores. The improvements in online shopping will continue to drive consumers until they are spending one in every 14 pounds online.”
The report suggests that established retailers with multi-channel operations will perform well during the period. “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.”
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