Online spending hits £58.8bn in 2010

Internet sales hit a record £58.8bn in 2010, an increase of 18% on the previous year - outstripping analysts' forecasts of a 13% growth rate.

Internet sales hit a record £58.8bn in 2010, an increase of 18% on the previous year - outstripping analysts' forecasts of a 13% growth rate.

December also saw record sales growth of 25% compared to the same month in 2009, reaching a total spend £6.8bn, according to the IMRG and Capgemini online shopping index.

The results follow warnings from analysts that the snow had an impact on sales for the sector, with delivery problems affecting consumer confidence.

But the poor weather, along with the impending VAT rise, was cited as a reason behind the growth.

As the snow fell, shoppers across the country opted to buy online, instead of battling the elements to the high street, said the report.

This trend had a positive effect on all online traders, including those with a multi-channel proposition. House of Fraser reported 120% growth in online sales compared to the same period the year before. Similarly, John Lewis and Marks & Spencer reported exceptionally strong results, it added.

Clothing saw a year-on-year increase of 40%, the strongest growth in this sector for 19 months, while alcohol saw the largest month-on-month increase, of 32%.

Chris Webster, head of retail consulting and technology at Capgemini, said, "The ongoing trend of consumers putting down the car keys and turning on their computers is only set to continue, particularly as consumers use the power of the web to make their money go further as the economic recovery remains fragile."

However, Davin Yap, CEO at web company Transversal, said if e-retailing sites are to continue to take full advantage of the e-retail upsurge, they must ensure their site stands out above the rest. "Usability is key and online shoppers need to be able to browse products and services quickly and easily, if not they will simply move on to a different site that offers similar offerings but in a more convenient way," he said.

For 2011, IMRG and Capgemini have predicted the Index will see a further 18% growth, with total e-retail sales estimated to be worth £69bn.

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