News

Is online shopping declining?

November 29, 2011

New research is showing that online shopping has nearly reached its peak. Shop Direct Group's sister company, Transactis, measured online shopping activity over the last five years and found that online shopping growth slowed to 8 percent in 2010, down from its 20 percent increase in 2009, 35 percent increase in 2008 and 58 percent upsurge in 2007.

Top line figures for the first two quarters of 2011 show, however, that in the first half of the year, online shopping rebounded slightly to 14 percent, but this figure is still well below the rate of previous peak growth recorded by the study.

The reason for the decrease, the study found, was that the majority of shoppers who fuelled the boom in Internet retail - the youngest consumers - are already established Web purchasers. If fact, 83 percent of home shoppers under the age of 35 make 80 percent of purchases via the Web.

A further finding demonstrates the greater value of multi-channel consumers over single-channel customers, including those who are online-only. Those using a mix of media put in roughly 50 percent more orders and spent nearly double that of online-only or offline-only buyers. And even when consumers migrated from 100 percent offline to 100 percent online, they were still spending considerably less than those who continued to use multiple channels.

"The customer journey has become a more subtle and complex process, led by the web," Michael Green, director of Insight at Transactis, said about his findings. "The range of influences and options consumers employ today are made ever more complicated by the opportunities opened to shoppers by smartphones, tablets and other portable devices and means that, for retailers, tracking and making sense of customer behavior in the multi-channel landscape is no easy task."

He said as the range of touch points grows and economic unease lingers, it is important for retailers to pull together, analyze and use all customer data they have to make sense of the behavior of customers choosing to shop from home and and effectively target them with appropriate marketing communications and offers.

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