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Credit Crunch

You are in: Manchester > Credit Crunch > 'Boom' on the e-street

'Boom' on the e-street

Looking out from the highest business premises in Manchester, Lawrence Jones has an unrivalled view of a hidden world: the world of e-shopping.

Lawrence Jones, MD of UKFast

Lawrence Jones of UKFast

His company UKFast, which is based on the 28th floor of City Tower in Piccadilly Gardens, looks after 250,000 web sites, all busy trying to compete in the world of e-commerce.

Yet, far from the gloomy sales forecasts down on the High Street, managing director Lawrence Jones believes that online sales are soaring.

"I’d say we’re in the middle of a boom," he said confidently.

"And I’d say we’ve been in a boom for some time but because of the boom of the early years that went horribly wrong, people have been very nervous of saying that."

Success

If there is a boom out there on the e-street, then Lawrence Jones should know.

Add to shopping cart

Online sales are UP

UKFast has a quarter of a million clients, placing their web sites on servers which it maintains round-the-clock and providing quick and reliable connections to the internet.

The company’s success has been recognised in the 2008 MEN Business Awards, where it scooped a top prize.

Despite the current economic slowdown, Lawrence Jones said there were good reasons why good, small online businesses were doing well.

"Even with all this downturn and the doom and gloom that’s been portrayed across the world, if you have a business that doesn’t have huge overheads that’s kept lean and that’s able to compete against some of these larger businesses, you are going to have a competitive advantage immediately."

Adding: "So, therefore, smaller businesses with strong web presences are always, in my opinion, going to outperform the High Street."

Spending

Nationally, there is certainly clear evidence of a trend towards web-based shopping with UK shoppers forecast to spend £13.16bn online in the final quarter of 2008 - that’s £215 each.

Shoppers on Market Street, Manchester

High Street sales are DOWN

High Street favourite Marks & Spencer revealed that, while overall sales had fallen 6.1% during the second quarter of 2008, its online sales had shot up 34%.

And BBC News recently reported claims by the e-commerce group IMRG that online sales had reached nearly 20% of overall sales with web-based shopping continuing to outperform the High Street.

Elaine Ferneley, Professor of Technological Innovation at the Salford Business School said there were a number of reasons why online shopping was proving so popular.

"People are more conscious of what they’re spending and, with sites like Kelkoo and Pricerunner, the web allows them to make useful cost comparisons when they’re looking for a bargain," she said.

Professor Ferneley also said that shopping online was less painful than going to the shops with your hard-earned cash. "If you’re sat in front of your laptop, there’s a perception by a lot of people that they're not really buying anything!"

Niche

She added that big companies like IKEA were already questioning whether they needed more shops and concentrating on their online sales. Even small niche businesses were seeing growth online, extending their sales globally, she said.

James Kight of Printerland

James Kight of Printerland.co.uk

Printerland.co.uk based in Altrincham is one of them. The computer printer business has seen its turnover soar from £2 million to £18 million in just three years, largely from online sales.

In spite of the global gloom, managing Director James Kight said they'd just witnessed their best two weeks' sales ever and were even recruiting staff to cope with demand.

"We've not dropped our prices or anything," he said. "We've just increased our marketing. It's about getting the fundamentals right, in terms of good customer service, and having a online side to the business that delivers."

Growth

Back on the top floor of City Tower, the success of e-shopping has even been mirrored by the growth of UKFast itself which has seen its own turnover rise from £4.1 million in 2007 to £7m this year with a projected figure of £18m for 2009.

UK Fast

The team at UK Fast

But what does the future hold? Will the current online 'boom' come to an end?

Lawrence Jones said he believed that a lot of the online success stories were ‘under the radar’ as he put it, and would go from strength to strength.

"There are a plethora of businesses that are busy churning away, making huge sums of money, and no-one really knows about it. And they don’t go shouting about it," he said.

Adding finally: "All of the businesses who are getting this right now are encouraging† more and more sales. That’s a snowball effect and I can’t ever see that finishing."

last updated: 20/11/2008 at 17:07
created: 17/11/2008

You are in: Manchester > Credit Crunch > 'Boom' on the e-street



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