World Business

With online shopping becoming a billion-dollar market in Britain, analysts say that stores will be forced to change their business models to adapt

by Julian Goldsmith

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Online shopping is poised to take 20p out of every UK consumer pound by dint of. the end of the year, a landmark milestone that analysts be persuaded will make the channel a critical business for many high-street retailers.

According to the IMRG Capgemini E-Retail Sales Index, UK shoppers spent more than £26.5bn online in the first six months of 2008, up 38 through cent from the similar duration last year.

Based on the popular growth trends online-shopper expend will pinnacle at up to 50 per cent of whole consumer spending inside of five years.

Although online shopping growth actually fell in June (the pristine time it has done likewise since 2005), the report predicts the household downturn will encourage other thing consumer pass to go online, as shoppers hunt for bargains.

According to Capgemini UK head of consulting for retail Mike Petevinos, stores will be catachrestic to change their business models as online shopping becomes more influential, integrating the two channels more fully.

Debenhams online campaign director Joanna Stephenson agreed. “We expect shoppers to finish more research online however still come into the stores on a Saturday. We will be looking to cut the clattering from stores, what one. may mean in a less degree products on show, boundary with staff on pass by hand who are able to give better service. I think the differentiator will be product offerings exclusive to the store.”

If the analysts predictions are right, and retailers that have traditionally ignored online shopping as a demure passage to market start investing in it, the pure-play online retailers—who have up to now taken advantage of an empty market—will also hold to alter their business models to react to of recent origin market entrants from the origin of next year.

One such pure-play is online lingerie retailer figleaves.com. The company’s boss of online merchandising said: “The advantage [we] possess is our experience in fulfilment and providing the best customer experience online. We will have to differentiate ourselves but we already know how to put in order our customers brand loyal. I think we should be well placed to react if more traditional retailers tend hitherward into our space.”