The future of online shopping is rosy.

25 May 2005

The future of online shopping is rosy in comparison to the gloomier forecasts for High Street retail.

While sales on the high street have fallen by 4.2% since February, e-retail has tripled from 13.4% to 30%.

Twenty two million UK consumers bought goods online during April, spending £1.4bn between them.

The figures, compiled by the e-retailing trade body IMRG represent a backlash to rip-off Britain, said chief executive James Roper. "UK consumers know that many High Street retailers have for years enjoyed very high profit margins while providing mediocre service and they still have the impression that they are being ripped off by cartels using unscrupulous business managers," he said. "The internet is trouncing them by exposing their scams and enabling consumers to quickly and easily compare offers. Consumers can't be fooled anymore. They are voting with their keyboards for the convenience of shopping online."

Bargain hunters HOW THE SITES WERE RANKED

Amazon ranked highest in terms of overall performance

Second - Comet

Third - eBay

Fourth - Argos

Fifth - Marks and Spencer Sixth - John Lewis Seventh - Boots Eighth - Dixons IMRG (Interactive Media in Retail Group) predicts that online shopping will grow by a further 320% by 2010.

Currently 7% of all retail takes place online and IMRG predicts this will rise to 20% by 2010 - representing 36 million Britons spending up to £60bn a year online.

The desire to find a good price for products is definitely the biggest driver of online shopping according to Keynote Systems, an e-business performance firm which has conducted a study into eight major UK e-commerce sites. "UK consumers are first and foremost driven by cost; they expect websites to undercut High Street store prices, and if they don't, they're likely to look elsewhere," said Bonny Brown, director of research at Keynote.

The study revealed that High Street brands hoping to profit from the online cash cow have some way to go compared to established e-tailers such as Amazon and eBay.

Style over substance

Over 500 shoppers were asked to use the sites of Amazon, eBay, John Lewis, Marks & Spencer, Argos, Boots, Dixons and Comet. Amazon trounced the rest when it came to overall performance, which took into account a range of factors including customer satisfaction, price satisfaction, purchase processes and perceived site performance. But Comet came a respectable second, largely due to its good search capabilities and ability to compare products and prices, said Ms Brown. John Lewis and Marks & Spencer scored well in visual appeal, reflecting a continued trend to put "style over substance" she said. The survey also looked at the things that put people off shopping online. Forcing people to register before they could make a purchase ranked highest on people's list of frustrations, with over a quarter (27%) annoyed by this.

Another 19% found inadequate customer ratings or reviews a problem and 20% wanted more transparency when it came to comparing items for sale.