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Rory Cellan-Jones

Christmas shopping: Online v High Street

  • Rory Cellan-Jones
  • 7 Dec 09, 10:02 GMT

It's supposed to be the biggest, busiest day of the year for online shopping - and as the amount we spend online grows each year, then today should bring a new record.

Online retailer's warehouseI'm spending the day in Play.com's giant warehouse off the M1 (they're rather sensitive about the exact location so I won't give it away) where they're madly packaging up DVDs, books, games consoles and other presents which will then be despatched across the UK.

In past years I've visited similar giant sheds run by Amazon and Argos, and have come away with the impression that online shopping has become the way most people now deal with Christmas. But that turns out to be wrong - what's surprising is not how much online shopping there is but how little.

The latest figures from the Office of National Statistics show that just 3.9% of retail sales now take place online. The Internet Market Research Group - which represents online retailers - puts the figure much higher, at between 10 and 15% but they include tickets, travel and digital music sales, which aren't counted towards the government figures.

Tthere's no doubt that online shopping is growing - though there was a bit of a hiccup last year - and is particularly popular at Christmas.

So last December its share of retail sales was 3.7% compared with just 2.8% in the summer. But it's still very much a minority sport. Take Play.com, which says it is the UK's second biggest online retailer. Its annual turnover is £450m, which makes it a respectable business - but when you look at Tesco's UK turnover for 2008 of £35bn they are still just a minnow.

A decade ago, as online retailing began to take off there were all sorts of outlandish predictions of how rapidly it would grow - if you believed some pundits, the high streets would be left deserted as we all retreated to our computers to do our shopping.

Some early experiments showed that it was not going to be that easy - remember Boo.com or America's Webvan? But others learned from those disasters and continued to grow, though even Amazon's profits look puny when compared with those churned out by Tesco.

Christmas shoppersWhat we've found is that while the internet is now the natural place for shoppers to look for books, DVDs, or gadgets, the high street remains the popular choice for a lot of other goods. Some households may choose to get their groceries online or look for designer clothes - but most food and fashion shopping still takes place in the real world.

Why people choose to brave the cold and the crowds to buy presents on the high street is something of a mystery - but maybe that annual ritual of endless queues, sharp elbows and Slade ringing in your ears, is still more attractive than just clicking your way through your Christmas shopping.

Comments

  • Comment number 1.

    Well, as the world runs out of oil and we cut more and more of the rainforest down, we won't need to worry about shopping online or in person as the earth's resources will all have been raped in the name of profit.

    I often wonder does the person or organisation with the most money when the end of the world as we know it comes, get a prize?

  • Comment number 2.

    For me there's nothing quite like touching and feeling the stuff you're going to buy.
    I've been a regular users of the internet for almost 15 years and also do business on line but I rarely buy on line.
    The last thing I bought online was a computer that was preloaded with windows vista and as normal with windows I had a crash and needed to install the os. Looked for the windows disc and there was none, rang the company ( a houseld name company) and was told I had to buy the disc seperately so I had to reistall the old window xp instead.
    There's nothing like going into a shop and talking to the assistant to know exactly what you are going to get and how much the full price will be.
    Internet shopping has a long way to go before it can be considered reliable, honest and trustworthy.

  • Comment number 3.

    I think the one thing which is stopping on-line sales is that people are unaware of how to return goods.

    My mother wants a new TV, but she would prefer to spend more and buy it from the highstreet rather than online because she knows if it breaks down she can carry it to the shop. If she bought from an online retailer she would have all the trouble of chasing e-mails or call centers for a returns number and then finding a way of posting it which didn't cost the earth.

    She does use mail-order companies for items like cothes but she knows that these companies will send a courier to collect anything she wants to return.

  • Comment number 4.

    The high street shop won't die out anytime soon, people generally prefer to touch and see a physical item rather than a photo on a web page (especially when there's a disclaimer stating that it's for illustrative purposes only). I do about 90% of my Christmas shopping online, it saves time on the weekends as I can search at home during the week after work, it's generally cheaper than the high street stores (even with P&P) and personally I've rarely had any issues with returning products if faulty or not what I expected.

    But there are some real hassles which need to be sorted if online shopping is to flourish, mainly around the delivery, I find Royal Mail/Parcel Force just seem to be awful each and every year, and (importantly at Christmas) up-to-date stock levels on the websites. In the last few years there has always been at least one company who say that they have an item in stock and able to deliver in time, only to find out a few days later that they're out of stock and the next delivery date will be well after the 25th.

  • Comment number 5.

    To comment # 3
    "I think the one thing which is stopping on-line sales is that people are unaware of how to return goods."

    You're allowed to ask questions before you buy and most returns, especially on higher value or weighted items, is free and the company will usually collect & return from your home.

    Online shops are good but if people are leaving all their shopping until the last minute (well, last payday) before christmas then more fool them. My shopping was mostly done months ago with the odd last bits and pieces bought the weekend just gone.

    Consumerism is driving sales but as per my original post, a 42" TV won't feed the family when oil, fish and other such items run out.

    Save the rainforest!!!

    Oh and Merry Christmas to one and all.

    Even you Rory, despite the promised and never delivered Ubuntu follow up, I still love ya really!!!

    ps. As cheesy as it is to say, presents are not the be-all and end-all of the meaning of Christmas - I'm also looking forward to spending un-interuppeted quality time with my wife and kids.

  • Comment number 6.

    It's a curious thing, but now I think about it, all of the online purchases I can recall making in recent years have been from small retailers (a reconditioned Apple Mac from a specialist in Bristol, a new windscreen for my classic motorcycle from a supplier in Vista, California, an antique book from a shop in Oregon, and so forth).

    The last Christmas present I bought online, was a history of my Dad's old Air Force squadron from a (very) specialist publisher in Tonbridge.

    Appart from other boring stuff like Tax Discs, that makes up the bulk of my online buying pattern (i.e. it *has* almost no pattern). I'm almost certainly a complete abberation, in this respect, but I think my behaviour does prove that online sales can be made with sellers who are so far down the list, they're off the scale (precisely because they happen to stock things you'd never have a hope of finding in the big name stores - real or virtual).

  • Comment number 7.

    Amazon's profits look puny when compared with those churned out by Tesco

    Tesco is, of course, an online retailer as well.

  • Comment number 8.

    Hmm. Me and my girlfriend went out on Saturday afternoon with the intention of buying some gifts...having been confronted with drivers cutting in to the car park queue, road rage, parking problems, broken lifts from the rooftop floor, getting my toes stamped on with no apology, being barged by mothers using a child in a buggy as a battering ram, my girlfriend being knocked out of the way by one of said child-rams (in a shop), the central heating in the stores set so that it vaporises most of the moisture in the human body, shop staff that merely grunt and frown, shop staff that would rather be anywhere else and have no shame in letting you know it (via grunting and frown signals), a lopsided heroic failure of a town centre Xmas tree, no Woolworths, a man hacking and retching in WHSmith all over the magazines, other people that refused to catch-kill-and-bin it, a tepid overpriced coffee, more screaming children, a headache (each),a man with a TOUGH GUY sticker on his bumper that didn't understand the phrase 'pay at machine before collecting your car' until he was nudging an immovable exit barrier, depression, anxiety, no goods (apart from AA batteries, a magazine and two vintage radio tins of Marks and Spencer bisuits) and two hours forever lost...
    ..we got in and got the laptops out...

    sitting in a warm lounge with red wine and debit card, we got some damn fine gifts..so it's online shopping for me..but wait!

    I bet there will be a postal strike.

  • Comment number 9.

    Buying online is so much more easier. It's greener for the environment. Less time spent stuck in the Christmas rush traffic!

    The downside is people tend to think that online prices are the cheapest. This isn't always the case as there's some amazing bargains on the high street!

  • Comment number 10.

    This is the second article about online shopping I've read today, it must be Christmas. The first one was less scientific, though funnier.
    http://7reasons.org/2009/12/07/7-reasons-to-shop-online/

  • Comment number 11.

    I do the majority of my shopping online where things I cannot find in Tesco are concerned.

    Purely because my local council (Braintree, Essex) has allowed a shopping village (Braintree Freeport) to open and our high street to degrade so we're left with hairdressers, charity shops, one or two banks, a few pubs and a couple of supermarkets.

    We only have 1 DVD rental shop, and our "technology" shops have closed down also.

    Besides those shops that we do have, the local council are trying to make a "cafe culture" in the town. Which says to me our high street isn't there for shopping, and we must have a lot of wealthy stay at home parents with nothing better to do...

    So as don't have a car, nor do I have any interest in "designer" goods from Freeport Braintree it's online retailers for me when I do my shopping outside of Tesco. I feel I have no other choice.

  • Comment number 12.

    Fulfilment is essential for net shops. Couriers are mostly commercially orientated. They like a receptionist or a 'goods inward' clerk who is always there when they turn up. They (except some drivers) have never heard of the telephone let alone SMS and their depots are up to 30 miles out of town making collection often more expensive than the purchase. No wonder net shopping hasn't caught on.

  • Comment number 13.

    @8 - Nice post! Exactly the reasons I avoid the high street as much as possible.

    The only things I do not buy online are clothes - consequently I hardly ever buy any new clothes anymore!!

    This year, all my Xmas Shopping is now done and I have not made a single trip to a real shop. Online shopping has made Christmas shopping a pleasent experience for me and it also means that I get exactly what I need rather than having to make do with whatever I can find in a shop.

    Long may this continue!

  • Comment number 14.

    So let me get this straight. Play.com and Amazon are respectable size companies but not that big because their income does not compare very well to Tesco?

    Since when do play.com or Amazon see necessities? Would it not have been a lot wiser to compare their income to Dixons or another electrical store that at least sells comparable products?

  • Comment number 15.

    A mystery warehouse off the M1...surely everyone knows this means Milton Keynes. Does anyone have warehouses anywhere else?

  • Comment number 16.

    Sure. Venturing out into the marketplace for items that generally cannot be found online (which are becoming less and less) is probably still done, but mainly by the older generation. Keep in mind, communities were built upon social interaction exchanged while shopping for services and products in person. The new generation is the one who will begin withdrawing from society and conducting both communication and service exchange digitally. Hello Twitter. Google Wave. ..and online shopping experiences that are enhanced. Sure, people still don't like to wait online for purchases. They want INSTANT gratification and are disappointed, frustrated, and turned off by delays when such transactions don't happen in a blink of an eye. It's getting better. Services will pop up, like www.azgizmo.com, that help to eliminate the wait times associated with items that can't be INSTANTLY bought. More and more services, and programs will come along and will make the online experience much more efficient and more enjoyable. Just wait!

  • Comment number 17.

    I tried making a small online purchase today and found that most retailers tried to rip me off with an inflated delivery charge (up to 350% of the item ordered). While I would love to do all my Christmas shopping online, this sneaky attitude from small online retailers means it isn't going to happen.

  • Comment number 18.

  • Comment number 19.

    @14 I think an even better comparator for Play.com would be its direct competitors in the DVD/gaming/gadget business - GAME, HMV and Virgin Megastores. Virgin's already gone bust, GAME recently said it wasn't making money and I've no idea how HMV are doing but I doubt it's very well.

    It's interesting though that their warehouse is near the M1. I've been using them for years and had thought they were based in Jersey.

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