High street discounting affects online spend

Wednesday, 21 October 2009
Discounting on the high street is affecting the growth in online spending, reported the Financial Times. In new research by IMRG, internet sales rose just 1.9 per cent between August and September as customers hunted for bargains in store that were not available online.

This was the lowest monthly growth recorded since the survey was launched in 2000, while the year-on-year growth was 7.6 per cent, well below the 15 per cent trend seen for the past year.

Chris Webster, head of retail at Capgemini, said: “This is the lowest growth we have seen, for two main reasons: people weren’t buying their autumn/winter clothes because September was so warm; and because of the promotional activity on the high street.”

However, Mr Webster said he expected the findings to be a temporary blip.

“There is a lot of growth left in online retailing and we expect it to return to the trend figure of around 15 per cent,” he said.

“That will be helped by the fact that online retail is going through the next stage of its evolution, as retailers offer more advanced search functions.”

The study also found that retailers that only existed online did not sell as much per customer visit as those that had a presence elsewhere, such as on the high street or through a catalogue.

Mr Webster said: “Customers who shop online tend to shop in fewer locations than those on the high street. There is a bigger trust factor in shopping online and they are more loyal to the brands or stores than to the medium.”

Image: Discount Source: FT