Despite the economic gloom, 2010 was another bumper year for online retail, with a total of £58.8bn spent online in the UK, marking a rise of 18%, according to IMRG and Capgemini. In this article, key players in the UK ecommerce industry give their view on the past 12 months, and just what 2011 has in store for the growing sector.
Jonathon Brown, head of online selling at John Lewis, said: “We’ve had an outstanding Christmas and Clearance period in 2010, and there’s no doubt johnlewis.com was a vital part of that success. Online sales for the five weeks to 1st January 2011 were 42% up on last year, and it was particularly pleasing to have achieved several trading records. We have also now passed the £500m mark for online sales for the year.
“The hard work our team put in over the year to develop the website really paid off, especially when snow affected trade at many of our branches. The increase in online sales, especially during the adverse weather in early December, demonstrated just how important the website has become to our customers.”
Francesca Krajewski, Head of Communications at Naked Wines, comments: “We had a strong festive period at Naked Wines, with sales up 100% on last year – and over 35,000 cases shipped in the first three weeks of December alone. 99.4% of all orders were delivered when promised, thanks to a sterling job by Parcelforce our carrier.
“Since launch, we’ve seen a 100% growth year-on-year with sales of over £15 million. To make our mark , we knew we had to offer both consumers and producers a game-changing model – and by inviting UK wine drinkers to invest in their wines before they’ve been made, we’ve attracted over 100,000 customers in our first two years of trading. The website, which is hybrid of social network and wine merchant, also offers customers and winemakers a platform to interact and shape the direction of the business – and with a £10 million investment pot to invest in new winemakers, we’re forecasting strong growth and an exciting year ahead.”
Phillip Rinn, Director of Advertising Partnerships for eBay Advertising in the UK and Ireland, comments: “The latest IMRG Capgemini e-Retail Sales Index reflects that Christmas 2010 was a bumper festive period for online retailing in the UK. That online shopping saw a 25% growth on December of the previous year, highlights the level to which UK consumers migrated to the virtual high street during the poor weather. Indeed, online clothing retailers saw a 40% year-on-year sales increase and perhaps more impressively, a 50% leap in conversion rates, illustrating that the internet is increasingly becoming the place where consumer browse, research and indeed buy items of clothing. As we progress through 2011, brand marketers should be aware of the potential to reap the benefits of advertising on e-commerce sites, which allow them to reach consumers who have high purchase intention at a time when the VAT hike and rising inflation are likely to squeeze consumer spending.”
Mark Lewis, CEO of Collect+, comments: “The soaring volumes for Collect+ this Christmas reflect the true demand for flexibility and convenience in returns and deliveries. A combination of the snow and changing shopping habits meant that purchases were made later than ever this year, and we were pleased to be able to provide our retail partners with a new and effective way of keeping their delivery promises and maintaining a returns service in the face of bad weather.”
Bruce Fair, Managing Director at Kelkoo, comments: ‘’More than a third of British consumers admitted to buying items early to beat the January VAT increase which will have contributed to last month’s strong sales across the sector. This coupled with a natural peak in sales over the festive season and December’s adverse weather conditions saw online retailers reaping the rewards as more people than ever before bought their goods online. However, the retail industry is moving into a difficult period following the VAT increase – our research predicts that consumers are expected to reduce their annual spending by £324 this year – so online retailers need to ensure they’re offering the most competitive deals in the market to avoid seeing a sharp drop in consumer spending.”
Bjorn Kvarby, European Managing Director, Shopping.com, comments: “Technology, fashion and home improvements were key drivers making 2010 a bumper year for Shopping.com, seeing overall growth in December at an average 24% year-on-year. Despite the recession leading to conservative forecasts for 2010, consumers proved that although they may be watching the pennies, they are becoming cannier that ever, attracted to the money and time savings they find when shopping online. Innovative product launches like the iPad have re-ignited consumer interest in the latest technology gadgets, with eBooks and Tablet PCs accelerating growth of our computer category at 50% year-on-year. Secondly, fashion leaped forward with average growth of 45% in December, year-on-year. Finally, with the uncertain property market, consumers turned to updating their homes themselves, with building supplies and home furnishing achieving average growth of 43% year-on-year. The momentum behind online shopping means we’re remaining quietly confident for 2011.”