UK's e-Commerce Market Continues Strong Growth

April was another good month for e-commerce activity in the UK, with the British Retail Consortium (BRC) reporting that sales were up by 8.3%, year on year, with mobile usage continuing to play a major role in driving growth.

While the growth was slightly down compared with the 9% expansion seen in April of 2012, it indicated that e-commerce is still resilient to ongoing economic pressures, which continue to play havoc with the high street.
Looking at the UK’s retail market as a whole, it seems that consumers are still slightly nervous about the state of the economy, which is having an impact on spending. Sales across all channels were down by 0.6%, although on a like for like basis, the drop was a little over 2%.
The increasing significance of m-commerce is something that the BRC reported on this month, pointing out that many companies are now seeing a fifth of all online orders being placed from portable devices.
The use of smartphones by customers to shop online has stimulated the interest in this new channel amongst retailers, many of whom are choosing to invest in the creation of mobile specific e-commerce sites or even dedicated applications which can be downloaded to handsets.
Smaller retail outlets said that adopting the multichannel approach was proving to be very beneficial and was actually helping them to enhance their in-store experience. For example, if the actual space available is limited, customers can browse a wider product selection using tablets.
The slight dip in the growth rate of online sales in April is partly being blamed on the fact that many multichannel retailers are now looking to unify the prices of products across all of their potential outlets.
In the past, there have been situations in which retailers make products cheaper to buy online than they are in-store, which has encouraged consumers to look to the web for their bargains. This has also encouraged the practice of ‘showrooming’, where customers go to a bricks and mortar shop to get firsthand experience of an item, before heading home to buy it online, at a lower price.
However, if there is a parity between how much something costs on an e-commerce site and in the shop operated by the retailer, then there could be less incentive to use the web.
Pure play online retailers can benefit from this set of circumstances because it means they can use their lower prices to once more stimulate interest in shopping online, rather than heading to the high street in any capacity.
BRC spokesperson, Helen Dickinson, said that April’s online sales in the UK were also impacted by the lack of a boost from the Easter holiday, which fell earlier in 2013. She said that the long term forecast for e-commerce remains positive and the levels of demand for online shopping will continue to grow.
This is good news for any e-commerce site owner who is hoping that they will be able to find success going forwards.

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