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Rory Cellan-Jones

E-tailing - has the revolution arrived?

  • Rory Cellan-Jones
  • 13 Jan 09, 16:47 GMT

Two sets of figures out today confirmed what I'd expected - that amidst all the economic gloom, online retailing continued to boom at Christmas.

One set of statistics came from Nielsen Online [pdf], which puts web traffic under the microscope. Its report says that traffic to the top ten UK retail websites was up by 37% in the last quarter of 2008 compared to the previous year. Ready to buy

No surprise that Amazon is at the top of the list with a monthly audience of 15.6 million. But that was a rise of just 18% on the previous year, whereas the figures for some traditional retailers were far more spectacular. Argos saw its audience rise by 32%, Marks and Spencer had a 46% rise and Littlewoods' audience was up 66%.

Earlier the British Retail Consortium had issued its survey for December, and it was packed with gloom and doom. "Worst December in Survey's History," was the headline on the press release, and it's obvious that the high street had a pretty miserable Christmas. But right at the end was this line: "Non-food non-store sales in December were 30.0% higher than a year ago." That means online retailing to you and me, and it's a far better performance than was predicted, even by the online retailing industry.

In the past the BRC, which in the main speaks for the big high street retailers, has been sceptical about the share of total retail sales enjoyed by the online sector. It puts it at under 4%, while the IMRG, which describes itself as "the voice of e-tail", claims it is much higher at around 15%. Whatever the true figure, two things are clear - online spending is growing rapidly, while high street spending is shrinking.

Back in the late 90s the dotcom evangelists told us that online start-ups would crush the dinosaurs of retailing and leave the shopping malls and high streets deserted. That didn't happen - but a decade later the online retail revolution is finally happening. And funnily enough, the dinosaurs are now leading the charge.

Comments

  • Comment number 1.

    I'm surprised that online retailing isn't climbing faster (given it's relatively small market share). Firstly you don't have to deal with crowds and secondly it's perceived to be cheaper than buying in store.

    The latter reason means that online sales should be rocketing in the current climate.

  • Comment number 2.

    As one form of spending falls, bringing with it suppliers and side-industries (just witness the mess that Woolworths DVD distribution subsidiary brought to Zavvi) - other sectors benefit with the online spending boom. The Royal Mail and the other courier companies are also getting more packets to deliver!

  • Comment number 3.

    The slow rise in internet retailing is to be expected; there is always a grace period where the public is sceptical about new things - now that people realise without shop floors and huge overheads prices are reduced they will, in my opinion, slowly migrate to online retailers.

    The problem I have is that most of these online retailers are also traditional retailers, or owned by the same holding companies as traditional retailers, and in most cases are either equal or fractionally cheaper in price, save for the giants (play.com for example) - if you buy a loaf of bread from tesco it is the same online as it is from the shop.

    This lead me to compare the prices and to be honest, after all the ranting and raving done by these online retailers about how they are cheaper because they have less overheads - you realise, yes they are cheaper, HOWEVER - 1. their return/exchange policy requires you to post the item back to them at your own expense (credit to littlewoods and nike who not only dont charge but also do all the leg work by picking it up)
    2. they want you to pay for delivery unless you spend £50/75/100
    3. they bombard you with countless emails offering sales when youve bought one item from them years ago (thank you very much nike) - in the pre and post chrismas sales ive been received on average an email a day off nike offering discounts etc


    whilst the online retailing landscape has changed, I think that in terms of who loves it, right now it is most definately the bank managers who are comparing the profitability of these websites who are saving upwards of 40% on running costs and sometimes offering no discount what so ever, why do online retailers think they exist? - It is to be cheaper than the high street because they aren't on the high street, do not be an alternative, be THE ONLY option.

  • Comment number 4.

    Online retail has so far tended to do disproportionately well with high ticket items (eg travel and electronics), where the consumer may well use all the resources of the High Street going into shops and using up High Street retailers time and real estate and then when they've decided what to buy they go online to pick it up at the cheapest place possible.

    Given it's often the juiciest stuff the High Street is losing to the Internet, it doesn't take much of a fall to have a significant effect on profit.

    And of course if one distinguishes between out of town shopping and true High Street, it looks even worse for the long term future of the true High Street..

  • Comment number 5.

    "But that was a rise of just 18% on the previous year, whereas the figures for some traditional retailers were far more spectacular."

    What is the obsession with percentage rises all about?! With an increase of 2.4 million, Amazon has a larger rise than all other companies in the top 10 making percentage comparisons misleading.

  • Comment number 6.

    I agree with 5. A bit careless.

  • Comment number 7.

    I'm not surprised that Amazon's percentage increase isn't as good as that of Marks and Spencer and Littlewoods. After all, Amazon has been online for a long time and we are all used to them being there. As more people do there shopping on the web, they will undoubtably become more adventurous with regard to the sites they visit, with traditional high street stores being able to take advantage of that.

  • Comment number 8.

    I buy everything on the net including books from amazon or bits and pieces from Ebay. I recently even bought great Oxygen Electric Bike. Just buy everything. E-tailing is a future

  • Comment number 9.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 10.

    My original post was removed because the BBC email said it contained copyright material (links and copy presumably?). Anyway I've tried to modify this accordingly by summarising...

    Not sure where to put this current post (for July) other than this January article about etailing:

    The concept of 'Etail 3.0' described recently in business media and in various places on the Internet (Marketing Week, mad.co.uk, blogs, Twitter, and commercial websites) is an interesting one that could help galvanise the retail business.

    During recessionary times, if any 'etail' (online shopping) business needed a shove in the right direction, then indicating that 'etailers' can beat town centre competitors is a great way to flag it up.

    The proof that 'etailers' can overtake town centre shopping is there:

    IMRG (Interactive Media Retail Group) predicts that 20% of the UK's £300bn retail business will be e-commerce based by the end of 2009.

    What 'Etail 3.0' highlights to 'etailers' across the country, even the world, is that they have a significant opportunity to combat the recession and pick up increasing market share by focusing on improving their 'etail' ecommerce websites.

    That can only be a good thing.

    mark.

  • Comment number 11.

    Thanks for approving my post. I just noticed in the copyright warning email that you sent me you were ok about including appropriate external links. In my deleted post I cited a few so have re-added them below.

    'Etail 3.0' on the Internet: described recently in Marketing Week, on mad.co.uk, in blogs, on Twitter, and now on commercial websites. Search engines are now featuring the term: 'Etail 3.0' searches on Google, Bing and Yahoo.

    (Don't want to waste your time but can you allow these links as they are highly relevant to my post - else guess you will remove...? Because I'm not 100% sure why you deleted my first post, thought I would try to reference the links as per your House Rules.)

  • Comment number 12.

    Online retail is already here and well established in many sectors, and also continuing to grow despite the recession. There are some very sound reasons why, especially for higher value items. Why risk paying too much for your new LCD TV for example, when you can just use a price comparison service like www.buydigital.tv and ensure you get the best possible price. And all without having to ask the salesperson to give you a better price!

 

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