Online sales reach £5bn with annual growth of 18%


Online sales reach £5bn with annual growth of 18%

Rebecca Thomson

Online shopping is growing at its fastest rate since 2007, with UK consumers spending a total of £5bn online in July, up 18% on the same period last year.

The past two years have seen a tipping point for online retail, with promotions drawing shoppers online and consistently high growth since the start of 2010.

The IMRG Capgemini e-Retail Sales Index showed spending in July grew 18% compared to July 2009, and 14% compared to June 2010.

"Although online retail sales survived the recession more convincingly than high street sales, the last two years or so have no doubt been shaky at times. It is really encouraging to see growth levels returning to those seen pre-2007 and before consumer confidence was knocked by the financial crisis and recession," said Chris Webster, head of retail consulting and technology at Capgemini.

E-commerce is now high on the list of IT investment priorities for retailers, according to research by Martec International, with those who have yet to jump on the bandwagon rushing to do so.

July's high growth was partly attributed to the country's higher than average rainfall. Travel sales rose by one-third, with consumers looking for late deals on cheap holidays to escape the UK weather.

Brands with both a high street and online presence did better than online-only retailers, seeing growth of 18% compared to 8%.

Multichannel retailers also managed to convert more browsers into sales, with a conversion rate of 4.49% compared to 4.35% for online-only companies.

David Smith, managing director of IMRG, the industry body for global e-retail, said, "The evidence mounts that high street retailers will need to invest more in their online business and put it at the heart of their retail strategy. Online retailers, on the other hand, will need to continue to innovate as they strive to close the growth gap."

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