The value of the UK online retail market reached an estimated worth of £77 billion according to the Interactive Media in Retail Group. With the global ecommerce retail market worth around £684 billion and growing, the scope of the online opportunity for both B2C and B2B remains huge.
Online commerce has begun to change the way we make sales. Due to the convenience, mobility and ease in purchasing products online, it promotes impulse purchases and encourages increased consumer and client spending. Consequently, statistics have shown that 20% of total online sales were said to be completed through mobile channels such as smartphone and tablets. According to the Guardian, this has resulted from an upsurge in online sales of 17.8% and an increase in popularity for many companies ‘click and collect’ mobile facilities. These services, often promoted through the form of mobile applications, intensify stimulus to make sure consumers purchase right away and add a sense of urgency to their purchase, in order to reserve their products quickly.
Some firms have gained so much from online sales that they have begun to surpass high street sales rates. Retail Week has highlighted that home retailer Shop Direct managed a year on year online sales growth of 150% in 2012. This comes from a strong drive in mobile commerce and their online sales accounting for 80% of total Christmas revenue.
Furthermore, although statistics have shown that an average of £128 is spent per person on online purchases, not all statistics show such optimism. Business News Daily have suggested that in 2011, Christmas sales increased by 1.5% from the previous year, whereas 2012 only saw a 0.3% rise in sales. Nevertheless, it was the online augmentation of 17.8% in sales, which allowed overall sales for many companies to remain in the black.
Similarly, recent news has shown that online giant Play.com has had to close its direct retail business. This shock announcement was attributed in part to the end of a Low Value Consignment Relief, which allowed the retailer to sell items under £15 in value to be sold VAT free to the UK. The news of Play.com’s retail business closure has not only resulted in a loss of 114 jobs, but by becoming solely an online marketplace and not offering their own products, they risk the credibility of their carefully built brand being eroded unless only highly reputed businesses are allowed to trade on their marketplace.
In addition to Play.com, camera retailer Jessops and high street music giant HMV are the latest casualties to fall victim to the growing popularity of online shopping. This is an unfortunate reality, that increasing online purchases have been having adverse effects on high street stores. Many long-established retail companies continue to feel the pressure of the rise in ecommerce and the future of the high street is seemingly one of discount chains and charity shops. It’s interesting times.
Nevertheless, with the number of firms suffering from a decline in demand and sales, many are embracing ecommerce, integrating with online and putting their website at the heart of trading operations. Whether B2B or B2C, an online presence helps reinforce your branding and provides another incremental channel for sales which requires fewer resources and could potentially be the lifeline a struggling retail business needs. Overall, although regulatory changes and a damaged high street causes negative issues for numerous firms, the World Wide Web is allowing a real opportunity for firms to compete against blue chip organisations, access new consumers for much less marketing investment and is providing a way to aid the survival of businesses even through the tough economic climate.
To chat through some options for evolving your business offering online, speak to either Keri or the Willliams Commerce Business Development Managers on 0116 326 1116 or email us at [email protected]
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