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Online retail growth set to slow significantly

Online shopping is set to slow down significantly after 2014 as the channel matures and competition increases, according to research firm Verdict.

Growth will slow to a rate of 12% a year by 2014, compared with an average of 35% per year over the previous decade, it predicted, with the number of online shoppers set to rise to 32.5 million by 2014 - only four million more than today.

Malcolm Pinkerton, senior retail analyst at Verdict, said, "With the number of people shopping online becoming highly saturated, retailers will have to change and evolve their online strategies. Driving loyalty and increasing spend per head across all age groups will become vital to ensure growth.

"Success will not be about online versus in-store sales, but rather having a multichannel approach. Stores will use the internet to drive growth both in-store and online."

People aged 35 to 44, who currently spend a total of £6.2bn online and account for one-third of online retail expenditure, will be the demographic most likely to cut back on online shopping following the forthcoming government spending cuts, found the research.

"The young will be the most impacted and constrained as disposable incomes are eroded, but overall online will still outperform the high street, as people will use the internet to search out the best bargains," said Pinkerton.

According to the latest IMRG Capgemini e-retail sales index, UK online sales increased 15% in August compared to the same month last year.


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