Money, money, money

The ecommerce boom continues

Get ready for a lot of stats:

• The Verdict UK e-Retail 2008 Report puts the online shopping population at 22.6m.

• The £46.6bn ecommerce spend in 2007 was up 54% on the £30.3bn recorded for 2006 (Interactive Media in Retail Group – IMRG)

• The largest sub-categories are: Electricals (25.1%)
• Food and Grocery (24.1%) and Clothing and Footwear (11.5%) (Verdict UK e-Retail 2008 report)

• 15% of all retail spend was online in 2007 (IMRG Capgemini e-RetailSales Index 2008)

• The online boom is helping many other small retailers and suppliers to flourish in the downturn. Online shopping grew 38% year on year in the first six months of 2008
• says IMRG. This is in stark contrast to the trend of falling high-street sales
• which declined 3.9% in June
• according to the latest figures from the Office for National Statistics.

• Capgemini and IMRG report that for the first half of 2008
• 17p in every pound was spent online. This is roughly equivalent to half of all supermarket sales and larger than all retail sales for clothing and footwear.

• UK Internet traffic to the online properties of high street retailers increased by 18.7%
• compared with a drop of 10.2% for online only retailers. (Hitwise UK Online Retail Update, IMRG, 2008)

• The top 100 high street retailers online accounted for 1.85% of all UK Internet visits in July 2008
• equivalent to one in every 5 visits to an online shopping website. (Hitwise UK Online Retail Update, IMRG)

• The top 5 online high street retailers in the UK during July 2008 were: 1. Argos.co.uk (1.69% share of UK Internet visit to Shopping and Classifieds websites), 2. Tesco.com (1.27% share), 3. Next.co.uk (0.90% share), 4. Marksandspencer.com (0.74%) and 5.Johnlewis.com (0.58% share). (Hitwise UK Online Retail Update, IMRG)

Tills ring…are you listening? Christmas shopping online:

• Online shopping reached an all time high in the run up to Christmas, with £15.2 billion spent online in October to December bringing full year UK e-retail sales to £46.6 billion - up 54% on the £30.2 billion recorded for 2006 - according to the ‘IMRG Capgemini e-Retail Sales Index’. (IMRG Capgemini e-Retail Sales Index 2008)

• Following the lead of US traders in 2006, several leading retailers, including Marks & Spencer, Dixons and Comet, ran online sales promotions on Christmas Day itself, attracting significant levels of business while the high street shops were shut. Four million people shopped online on Christmas Day 2007, spending an estimated £84 million, an average of approximately £21 each. (IMRG Capgemini e-Retail Sales Index 2008)

• The largest sales growth can be seen in the specialist e-retail sectors e.g. the electronics sector saw sales growth of 60% in December 2007, indicating that online is increasingly taking the lead. The clothing sector shows a 28% increase on the same point last year and the beers, wines and spirits sector shows over a 20% increase. (IMRG Capgemini e-Retail Sales Index 2008)

• IMRG Capgemini e-Retail Sales Index research shows that the retailers who have both a high street and an online presence seem to have done better than the ‘pure-plays’. (IMRG Capgemini e-Retail Sales Index 2008)

• “Given the 2.6% year-on-year decline in actual physical visits to retailers reported by Experian Footfall for July, it looks like high street retailers will be more reliant than ever on their online operations this Christmas.” (Robin Goad, Research Director for Hitwise UK)

Online advertising spend in the retail sector:

• UK Internet advertising expenditure grew 38% year on year to reach £2.8 billion in 2007, commanding a market share of 15.3%. (IAB/PwC online adspend study H2-2007).

• Within the total online advertising spend for the latter half of 2007, paid for search accounted for 57.6% of the total share, display 21.0%, classifieds 20.8% and Solus email 0.6%. (IAB/PwC online adspend study H2-2007).

• The retail category grew its share of online ad spend by 1.7 share points to 5% in H2 2007 from 3.3% in H2 2006. (IAB/PwC online adspend study H2-2007).

• Online ad spend is beginning to grow in the retail sector and this can be attributed to a buoyant and competitive ecommerce market.

Despite booming ecommerce, the retail sector lags behind in the online advertising game - FACT

Category average online spend: 4% of total spend

The performance of selected online categories

Source: comScore Media Metrix – June 2008
Ranked by total U.K. Unique Visitors (000)
* Unique Visitors aged 15+, excludes traffic from public
Computers such as internet cafes or access from mobile phones or PDAs

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