UK retailers to suffer from an e-Christmas this year?

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By: Wise Marketer Staff |

Posted on September 11, 2006

High street sales in the United Kingdom are likely to be hard hit in the run-up to Christmas 2006 as consumers switch to shopping on the internet and spend increasing sums of money online, according to a study published by e-shopping rewards portal MutualPoints.

Almost one-third (31.8%) of the 3,500 people surveyed in London, Manchester, Leeds, Birmingham, Cardiff and Edinburgh said that they intended to increase their spending online during the coming twelve months. Almost half (44.1%) said that they would be spending less in retail stores as a result of going online to make their purchases.

Worst regions
This apparent intention to leave the High Street in favour of shopping online from home was noted most strongly among consumers in Edinburgh and Manchester, with 47% and 46% respectively agreeing that they would spend less in the shops as they bought more items online. Londoners followed closely at 44%.

According to Stephan Tate, European marketing director for MutualPoints, "An abundance of excellent deals available on the web is obviously helping the shift from High Street shopping to purchasing online, and that's integrating online shopping much more deeply into UK consumers' lives."

E-shopper segmentation
While the survey found that one-fifth (20%) of the UK's consumers shopped online an average of once a week, the biggest frequency group (41%) said they purchased products online once a month. And almost one-third (29.4%) of online shoppers reported they had spent over 300 on a single purchase.

According to Interactive Media in Retail Group, British shoppers spent some 13.5 billion online in the first half of 2006, up 40% over the same period in 2005. This represents a nationwide average spend online of over 2 billion each month.

Consumer research
Researching online and then buying online has become the most popular shopping method, the survey found, with 80% of consumers buying this way most often, compared to only half (50%) who said they often research products online before buying them in physical retail stores.

MutualPoints also questioned consumers about their internet security concerns. More than three-quarters (76.5%) said they felt safe when shopping online. Those in the North were most confident when buying online: 84% in Edinburgh and 82% in Leeds were very happy, compared to 73% in Birmingham and London.

Background provides an online shopping portal that pays its members to shop online. The portal currently claims over 700 e-retail partners, and more than 2 million members, with some 30,000 new members joining each month. Each purchase earns the member MutualPoints that can later be redeemed for cash.

MutualPoints itself earns commission from each purchase made through its retail partners, and passes 50% of that value to members. The company says it currently pays out some 44,000 in member reward cheques each month.

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