Online shopping growth outstrips expectations in 2011

Thursday, July 21, 2011 - 11:09 by Graham Miller

Over the first half of the year the e-commerce market in the UK grew faster than expected, expanding by 19 per cent compared to the same period in 2010.

People were turning to safe shopping online for many different reasons in 2011, with big events like the Royal Wedding helping to boost sales, while economic pressures were making more consumers ignore the high street in favour of seeking bargains online.

Sales reached £31.5 billion in the first six months of the year, according to figures published by Capegemini and IMRG. Analysts were not far off in their predictions made in January, with the e-commerce market actually growing one per cent more than anticipated.

While previous studies have found that safe shopping online need not only be about price but about service quality and convenience, IMRG has found that in 2011, it is increasingly being motivated by value above all else.

During the same period the year on year sales on the high street actually dropped by more than one half of a percentage point, which does not bode well for bricks and mortar retailers who are not starting to adopt e-commerce as an alternative stream of revenue.

While the UK's high street is still taking more money than e-commerce, sliding sales are making it more difficult for even the big chains to keep their doors open and in recent weeks we have seen brands like Argos and Tesco putting significant emphasis on their online offerings, as well as attempting to bridge the gap between high street shopping and web based services.

There is no doubt that equilibrium will eventually be reached between e-commerce and the high street, because each can benefit each other. But the balancing process is likely to be more painful for the latter.