Pure play online retailers secure significant stake in market

Wednesday, August 3, 2016 - 11:46 by Mike Price

Figures from the Office for National Statistics have shown that half of all consumer spending made via safe shopping online in the UK flowed through retailers which have no high street presence, the Telegraph reports.

This means companies like eBay and Amazon are actually gaining traction at the moment, in spite of the fact that traditional bricks and mortar brands are pushing ahead with their own e-commerce efforts, leveraging click and collect delivery to encourage people back into stores.

Back in 2010, just 41 per cent of consumer spending in the digital marketplace was attributed to ‘pure play’ online outlets, showing that there has been a rise in the amount of control exerted by fresher e-commerce brands.

Analysts believe that the high street is still playing an important part in determining the success of sites which offer shopping online, claiming that the rise of smartphones is making it possible for people to visit stores and see products in person, then use their portable devices to purchase them from the web.

The retail market is still largely focused on in-store sales, with around 88 per cent of purchases made at real world outlets. But the fact that traditional retailers are facing increased competition in the digital space from firms which have no physical presence in the UK, is indicative of how highly engaged consumers have become with e-commerce.

The barriers to a bigger increase in online spending remain similar to what they were five years ago, with sluggish page load speeds, poorly designed sites and problematic returns policies all putting consumers off the idea of web-based shopping.

But even with the high street clinging on to relevance for now, the increasing power of pure play retailers cannot be ignored by the bricks and mortar market.