Online Marketing

UK's online-only retailers net 23% sales uplift

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Sales at the UK’s 20 biggest online-only retailers jumped 23 per cent last year, as consumers embraced mobile shopping and artificial intelligence-driven features, a study shows.

Sales for the top 20 etailers by turnover jumped to £8.4bn in 2016-17 compared with £6.8bn the year before, according to research by professional services company RPC. The ecommerce boom was fuelled by the growth of mobile shopping apps, as well as technological innovations that enhance shopping experiences and convenience, the report said.

“The maturing of m-commerce is helping [etailers] super-charge sales,” said Jeremy Drew, co-head of retail at RPC.

“From being virtually unknown five or 10 years ago, many online-only retailers are building strong brands and grabbing more and more market share,” he added.

The UK’s top three online-only retailers — Shop Direct, Asos and Ocado — had combined sales of £5.1bn in 2016-17, up from £4.4bn the year before.

In-app features AI-driven chat bots to advise shoppers on purchases, “snap and shop” services that enable product searches via smartphone cameras, and augmented reality features, had all helped spur sales, he said.

A report from internet marketing group Criteo last month showed that 53 per cent of online purchases in the UK were made via a mobile device in the last quarter of 2017.

As more consumers shop digitally, traditional bricks-and-mortar retailers are increasingly reliant on online sales for growth, said RPC. It pointed to Marks and Spencer’s online sales growth of 5.6 per cent last year, compared with just 2.2 per cent for total group revenue.

RPC’s report comes after a grim time for traditional high street retailers. Last week both the UK arm of Toys R Us and Maplin Electronics fell into administration, while Mothercare warned it needed extra help from its lenders because of the “challenging trading environment”.

Karen Hendy, RPC’s co-head of retail, said strong online-only sales growth may lead to a wave of consolidation among etailers. Last year, online fashion retailer Boohoo acquired online rival Pretty Little Thing as well as US fashion label Nasty Gal, in deals worth more than £19m.

“Some of the larger players will be keeping an eye out for fast-growing platforms they can bolt-on, in order to rapidly grow their customer base or to give themselves a foot in the door of new markets,” said Ms Hendy.

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