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Online shopping grows despite recession, index shows

Online shopping grows despite recession, index shows

Internet shopping in the home and fashion sectors has been booming according to the new Transactis Home and Fashion Online Retail Index, as total web spend was up by 12% last year despite the recession.

The index, which takes in figures from 178 retailers representing 38.5 million customers, showed that the shift to digital came despite an overall 17% decline in home shopping in 2009.

Transactis figures also show that 47% of home shoppers made their purchases online in 2009 – up from 38% the year before – and annual web spend per person increased form £351 to £376.

However, Transactis is warning retailers against taking these figures as evidence that traditional mail order shopping is dead and that all investments should go into the web channel.

Instead, the company suggests that the picture is more complicated as customers in different demographics favour different channels and most shoppers consult a range of media in making purchasing decisions.

Dylan Jenkins, Head of Retail and Home Shopping, Transactis, comments: “A cursory glance at these figures might give the impression that consumers are abandoning the high street and big books in favour of the internet. However, one need only look at the age and category breakdowns for these figures to realise that it’s not a simple case of online versus offline.”

The index, which covers purchases of children’s merchandise, fashion items, home interior products, household goods, gadgets and certain other products bought through catalogues and websites, shows that younger profiles are more active online.

The 18 to 24-year-old group displayed the greatest increase in total web spend (up 27%), average web spend per person (up 35%), average web transactions per person (up 33%) and total web transactions (up 25%), making it the most active group online.

The largest group of online shoppers is made up of 35 to 44-year-olds who accounted for 29% of all web spend in 2009, but 25 to 34-year-olds represent the group with the highest average annual web spend per person at £513.

The greatest growth in online participation is coming from people aged between 35 and 54. In 2008 52% of 35 to 44-year olds and 40% of 45 to 54-year olds made online purchases. In 2009 this increased to 66% and 52% respectively.

Transactis’ Home and Fashion Online Retail Index clearly illustrates the dangers of making assumptions about shoppers based on their age.

It is easy to assume that middle-aged shoppers are very loyal to their catalogues and Royal Mail’s 2009 home shopping and multi-channel retailing trends report certainly suggests this is the case. However, the Transactis Index shows that this should not be taken at face value and the greatest growth in online shopping activity is actually coming from 35 to 54-year olds.

Jenkins adds: “This kind of insight is vital for online retailers and cataloguers alike if they want to target their customers in a relevant fashion. With such dramatic changes in customer shopping habits, retailers must be on the ball when tracking the behaviour of individuals. It is crucial for retailers to understand how each individual behaves online as well as offline.

“One of the best resources for this can be pooled transactional data. By bringing together multiple data sets from different members of the pool, a 360 degree view of each customer can be realised across all touch-points in the market. This not only helps retailers target individuals with relevant offers, but can help them create profiles of the best customers and then search for look-alikes who are not already customers within the pool.”

AJR
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