U.K. Online Shopping Races Ahead

British consumers spent more online in 2011 than any other country in Europe, e-retail experts have said. Online retailers have experienced healthy sales growth in 2011, with the latest figures revealing a 16 percent increase in spend on the previous year.

Figures show that shoppers in the U.K. spent a total of £68 billion online in 2011, according to the IMRG (Interactive Media in Retail Group) Capgemini e-Retail Sales Index.

Online retailers experienced a successful Christmas period, with shoppers clocking up £7.9 billion in purchases online in December alone, indicating 16.5 percent year-on-year growth on December 2010.

E-retail now accounts for 17 percent of the total UK retail market. Online shopping is likely to increase with the rise of mobile commerce and the huge number of tablet devices sold throughout 2011, industry experts said.

Chris Webster, head of retail and vice president of Capgemini, said strong online sales over Christmas were even more impressive since they built on a 25 percent year-on-year growth from 2009 to 2010. "During 2011 we saw continued pressure on sales, as shoppers became savvier in looking for bargains and this continued in the run-up to Christmas." With the popularity of tablet devices and smartphones, Webster said the rapid rise of mo-bile shopping in 2011 will continue into 2012.

"This changing landscape will open up a myriad of opportunity for retailers, including integration of stores into the multi-channel worlds and the potential of new capabilities like location-based marketing services," he said.

While Christmas sales in December 2011 fell below growth levels from the preceding 12 months, they demonstrate that the online market still offers positive growth opportunity. The slowdown in sales in the second half of 2011 was due to decreasing sales in the travel sector and a decline in year-on-year growth for the clothing sector, which dropped from 40 percent in December 2010 to 12 percent in December 2011.

"A number of well-known fashion brands at the mid- to low-end of the market reported poor sales in their recent trading statements, while luxury brands are turning huge profits," Webster added. "This is partly due to the spending power of middle-income Britons being squeezed by rising inflation and low wage increases, while high-net-worth individuals continue to earn and spend."

James Roper, CEO of IMRG, said despite consumers finding themselves with less and less disposable income, the e-retail market keeps defying the general retail trend to record double-digit growth. "Online is such an integral part of the shopping experience now that it generally plays at least some part in most purchases, whether through research and comparison or social media and product reviews," Roper said.

"We are forecasting growth of 13 percent moving into 2012, lower than our estimate for 2011 but it would still be an extremely positive performance given the economic climate and the fact that the online market has reached a degree of maturity now, meaning it can offer a really key contribution to help drive the economic recovery."