Christmas already for e-retailers

Online sales more than double year on year as Britons splash out on clothes, food and alcohol

Massive consumer demand from Britain’s 14.3 million online shoppers flooded electronic retailers with &£860.5m of orders during October, according to the latest Interactive Media in Retail Group (IMRG) Index data.

During the 30 months it has tracked UK e-retail sales, the Index has risen ninefold, to 902, and the pace of growth continues to accelerate. The October Index was based on sales of almost &£200m reported by 68 participating electronic retailers.

The two previous Octobers monitored by IMRG saw strong online sales, but this year’s was stronger, with a huge month-on-month growth of 21.5 per cent. Year on year, e-retail sales continued to more than double – they were up 113.6 per cent. General retail sales grew 7.1 per cent annually, according to the British Retail Consortium Index.

Voodooshoes.com director Paul Bond says sales figures are up 100 per cent on the same time last year: “The two most encouraging things are that there is a high level of orders from repeat customers and that the public appear to have overcome their initial reluctance to pay by card online.”

Other electronic footwear retailers echo this sentiment. Shoesdirect.co.uk managing director Tim Lodge states: “Whereas our high street shops are showing a modest five per cent annual growth in like-for-like sales, online sales are up 60 per cent.”

Other sectors are doing well too. “Virgin Wines has experienced a huge surge in sales in the past few months, driven largely by a sustained increase in repeat purchases, which bodes well for our key Christmas trading period,” says chief executive Rowan Gormley.

Jeremy Palmer, e-commerce director at Majestic Wine Warehouses, says: “For the second year running, Majestic Online is seeing a marked increase in its share of Majestic’s overall business in the run-up to Christmas. This ability to soak up extra demand without putting extra pressure on our retail operation is a real benefit to the company as a whole.”

“Our order rate this year remains pleasingly strong,” says Furniture123 marketing director Paul Haddock. “October was typical, with orders 114 per cent up on October last year.”

Thorntons head of e-commerce David McQueen Johnston says: “Customers are demonstrating more confidence in direct delivery channels. This is showing itself in a trend towards earlier ordering for Christmas.”

The Food Ferry is experiencing “a buzz in the air at the moment”, according to chief executive James Millar. He continues: “Our Web sales continue to impress. During the period from May to October, we have notched up four record-breaking months. The site has been extremely active.”

Since the spectacular demise of boo.com, it has been widely assumed that people will not shop for clothes online. But this sector is proving to be a star performer, according to IMRG.

In October, Britons spent over &£75m on clothing, footwear and accessories online, 132 per cent more than last year. The cold, wet weather pushed e-retail sales 32.5 per cent higher than th

e previous month, as consumers bought knitwear, coats and boots and did some early Christmas shopping.

Ann Summers, which has reported a steady increase in sales since it launched annsummers.com, claims sales have boomed over the last month. Marketing and brand development executive Rebecca Franklin says: “This has been put down to TV exposure through Channel 4’s Sex Tips for Girls, early Christmas sales and the introduction of our new, raunchier site, annsummersuncut.com, which has sent sales through the roof.”

Sixty-eight e-retailers contributed data to the IMRG Index in October. Those identified publicly as participants include theAA.com, Arcadia Group, Argos, Boots, Carphone Warehouse, Debenhams, Firebox, Marks & Spencer, Mothercare, Next and Waitrose.

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Online spending in Europe during November and December will reach E4.5bn (&£2.8bn) – a 55 per cent increase over the same period last year, according to Jupiter Research.

This continued growth in online sales is being fuelled by the rapidly increasing number of online shoppers in Europe. This is far outstripping the growth in the European internet population as a whole. By the end of 2002, the online buying population of Europe will have increased to 52 million, from 36 million in 2001.

It is clear, according to Jupiter, that high-street retailers’ online investment is beginning to pay off as existing internet users gain the confidence to start shopping online.

Online spending will be highest in the UK, with the total spent in November and December expected to reach E1.4bn (&£850m) – a third of the total online spending for the year. Closely behind the UK is Germany, where E1.1bn (&£700m) will be spent in the run-up to Christmas.

Consumer electronics, PCs and entertainment products (books, videos, DVDs and music) are expected to be the largest retail categories, accounting collectively for over one-third of total online Christmas spending.

www.imrg.org

www.jupitermedia.com

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