Business - Online Future For Retailing

http://www.imrg.org/

Continuous technological developments

• Online shopping expectations?

Massive retail space growth continues. Such expansion comes as online shopping continues to grow and cannibalise store sales. Retailers must enhance the physical shopping experience to offset this, though online is expected to peak at 10% of all clothing retail sales. (Mintel, 2007)

People are increasingly prepared to pay more for quality products; they prefer niche to mass-market brands, and they like the convenience of being able to order from home. Increased broadband internet access has smoothed this process - 64 per cent of UK homes are predicted to have broadband by the end of next year. (Telegraph.co.uk 2007b)

In the past there have been concerns about security, the technology, speed, delivery and returns, and by and large these have all been dealt with," he says. (Telegraph.co.uk 2007b)

The general growth of internet use has been supplemented by the medium's warm embrace by the over-55s in the past two years. These so-called "silver surfers" may have arrived late at the internet party, but they are showing no signs of leaving. Indeed, this age bracket has been identified as the big online spenders of the future. (Telegraph.co.uk 2007b)

The demographics speak for themselves. A total of 33 per cent of the population is over 55 - but only 19 per cent of online shoppers were in this age bracket in 2005, according to the latest available figures. But this proportion had grown from 12 per cent in 2004 and just 8 per cent in 2000, and is forecast to increase further. (Telegraph.co.uk 2007b)

The growth in internet adoption by the over-55s coincides with the broader trend of an ageing population. The number of shoppers in this age bracket grew by nearly 90 per cent to 2.7m in 2005, equalling the number of shoppers in the 15-24 age bracket, according to research by Verdict Research. (Telegraph.co.uk 2007b)

Online retailing of clothing has been increasing year on year. In 2004 online clothing retail was the fastest growing online retail sector (IMRG, 2004).

A BCSC report found that the average proportion of total sales attributed to e-sales was 4.5%. (BCSC, 2006). The average expected figure by the same retailers was 14.7% in five to ten years time.

E-commerce still accounts for less than 4% of the clothing market. It is believed that it could eventually reach 10% or higher. There is an increasing expectation from consumers that retailers should have an Internet offer and those that don’t