December sales on the internet set to double to £7.4bn

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December sales on the internet set to double to £7.4bn

If the high street is less crowded than usual for a fortnight before Christmas, it is not just because of the rain.

Shoppers have logged on to the internet in unprecedented numbers since last month, according to the e-retailing industry, which has released its third sales forecast for the year.

Internet sales are running at more than double the rate of last year and are on course to finish December at £7.4bn, up 106 per cent on the same month in 2006, according to figures from the Internet Media Retail Group (IMRG), whose members include Amazon and M&S.

It expects the year's online sales to come in at £53bn, £7bn higher than its estimate a fortnight ago and £11bn higher than it predicted at the start of the year.

And today looks set to be the busiest internet shopping day of the year, as consumers who failed to find gifts on the high street hunt for them online. According to IMRG, e-retailers should take £360m today, three times the average daily sale for 2007.

The British have become accustomed to buying by click and are the undisputed kings of internet shopping in Europe, with almost 40 per cent of the continent's online sales.

Website traffic surges in the run-up to Christmas each year, but the 2007 upswing is the fastest yet, with 87 per cent of 1,200 people surveyed by eDigitalResearch saying they will buy Christmas presents online. More than 62 per cent are expected to do more than half of their Christmas shopping online. In all, one in five sales is now online.

"It is unprecedented," said James Roper, the chief executive of IMRG. "The high street is flat and yet we are seeing this huge growth on the internet." Security fears, one of the biggest barriers to online shopping, have receded as customers become more familiar with using their credit cards without trouble. Far more homes also have broadband now: 15.5 million, treble the number in 2004. The IMRG now thinks sales for the last three months of the year will be £17.5bn, a leap of 82 per cent on last year.

Analysis of shopping patterns shows the midday peak is expected to be 11am to noon, two hours earlier than last year, when it was 1pm to 2pm, suggesting workers are not waiting until lunchtime to shop.

But around 40 per cent of online shopping is still done outside normal shopping hours, before and after most people work. "The evening internet shopping peak has become a standard phenomenon due to consumers' acquisition of broadband at home," said Chris Russell, director of the online market research company eDigitalResearch.com.

The big players online

* Online retailers who do not exist on the high street are still the biggest players in Britain's £53bn a year online shopping market.

Amazon, the original books specialist, has long been the most popular site, selling everything from tomes to trowels, together with listings for third-party "market place" sellers. Its American mother website is in the Top 10 too because it sells an even wider range of goods before they are available in the UK.

Jersey-based Play.com, similar but smaller than Amazon, concentrates on selling CDs, DVDs, electronic games and gadgets. Conventional retailers have begun to make their presence felt. Argos, the high street catalogue specialists, is the third most popular followed by Tesco, which delivers groceries and sells credit cards, car insurance and internet connection.

Two computer sites are popular: Dell and Apple.com, the home of the iPod and iTunes. Marks & Spencer's website, making its first appearance in the Top 10, is being rejuvenated by the former lastminute.com boss Martha Lane Fox. Next, another new entry, sells homewear, gifts and flowers as well as clothes.

The figures for the top 50 e-tailers are collected monthly by the internet traffic specialist Hitwise. The biggest trend in November was the arrival of several conventional bricks and mortar retailers in the top 50. River Island (42) Sainsbury's (45) and Dixons (46) all debuted. Of the top 50, the majority, 27, are now high street retailers – another sign that the internet has become mainstream.







By Martin Hickman, Consumer Affairs Correspondent
Published: 10 December 2007
© 2007 Independent News and Media Limited
 
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