£1 in every £10 is now spent online - but is there trouble ahead?

Online retailers are flourishing - as per usual. But their industry body warns growth might begin to slow.

by Emma Haslett
Last Updated: 06 Nov 2012
Retailers on the high street might be having a hell of a time, but out in cyberspace, shopkeepers are doing a roaring trade. According to figures from the Office of National Statistics, £1 in every £10 spent is now online. The ONS said us Brits spent an average of £539m a week online during September, giving e-commerce a 9.6% share of the £5.61bn total sales made during the month. That means the amount we spend online has more than trebled since early 2007. Not bad. Of course, this is good news for online retail giants like Amazon and Asos – but small businesses stand to benefit just as much.

This has come at a time when increasing numbers of big businesses are turning on to the possibilities of online retail: on Thursday, Debenhams said 7.4% of its sales had come through its website, while last month, Next reported impressive online growth (which, it admitted, came at the expense of its high street stores). Even Morrisons, which had been fiercely resistant to the possibilities of e-commerce, has begun to explore the wonders of the web – despite the fact that its founder, Sir Ken Morrison, once famously dismissed the idea.

But small businesses are arguably the ones which stand to benefit the most from online retail. With social media, analytics tools and pay-per-click , the interweb levels the playing-field between big businesses and the industry’s smaller players. Which, in turn, is encouraging for jobseekers: a study earlier this year found online retailers are expected to create 750,000 jobs over the next four years. Which should put a hefty dent in unemployment figures…

The only worry is whether or not e-commerce can keep this recession-defying growth going. IMRG, the industry body, isn’t as optimistic as usual: it’s trimmed its growth forecast for 2011 from 18% to 16% - which shows just how deeply the fall in consumer confidence is penetrating. Although that’s modest drop, all things considered. And compared with growth prospects for the economy as a whole (Ernst & Young’s ITEM Club slashed its forecast from 1.4% to 0.9% this week), it’s pretty good going. So if you want to get ahead, get online…

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