It is estimated that by 2010, UK consumers will be spending £18.5 billion a year on the internet that otherwise would have been spent on the high street, according to research by leading global payments system PayPal and Datamonitor. This is the first time that the shift from high street to internet has been calculated and will make shocking reading for UK retailers. By 2010, the internet will account for 6% of all consumer spending on goods and services. PayPal also predicts there will be nearly 25 million online shoppers in the UK by this stage: a rise of 10 million in the next five years. It expects that each shopper will spend an average of £48 per online transaction.
The ability to shop around, compare prices, and ultimately order purchases from the comfort of our own homes will contribute to consumer spending online rising skywards. The most lucrative online shopping sectors in 2010 are set to be food and grocery which will account for almost 30% of the total online retail market, an estimated £6,248 million and a rise of 235% on 2005 figures. The clothing and footwear category will be worth £2,274 million, an increase of 160% on today. Online sales of electrical goods will grow substantially and this market will account for £4,602 million of spending (an increase of 136%). This market is one where substantial sums are likely to move away from the high street. Geoff Iddison, chief executive of PayPal Europe comments: “Over the past few years we’ve seen the internet gradually eating away at the high street. By 2010, however, we expect substantial sums that would have been spent on the high street to have moved online.
“Our predictions are that more and more consumers will turn their backs on the high street and shopping centres in favour of the convenience of buying from home. The safety and security of online commerce has been firmly established with large numbers of shoppers. In the next five years, price and convenience will convert ever-higher numbers of people to the internet for their shopping.”
The PayPal research found that nearly half of UK adults (43%) claim price is the overriding factor pushing them to shop online, something that is particularly true for electrical (49%) and music purchases (53%). With over two-thirds (66%) of us likely to have access to broadband at home, shopping online in 2010 will never have been quicker and easier.
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