January 22, 2010, 12:00 AM

U.K. online sales rose 14% in 2009

U.K. shoppers spent £5.46 billion ($8.80 billion) online in December, 17% more than a year ago, a U.K. trade group reports. The peak week for online Christmas shopping was the second week in December—one week later than in 2008.

U.K. shoppers spent £5.46 billion ($8.80 billion) online in December, 17% more than a year ago, according to a report by the U.K.-based e-commerce trade group Interactive Media in Retail Group and technology consulting company Capgemini. For the year, online sales in the U.K. were up 14% over 2008.

At the same time that sales increased, the proportion of shoppers at a site who make a purchase went down. “A key trend highlighted by our index analysis is the 25% drop in conversion rates from 2008 to 2009,” says Jon Parry, principal retail consultant at Capgemini. “This is a clear reflection of the increased traffic using the Internet as a source of product information.”

The peak week for online Christmas shopping was the second week in December-one week later than in 2008. The trade group attributes later shopping to November’s postal strikes, shoppers holding out for bargains, increased confidence in delivery services and Christmas falling on a Friday. Some U.K. retailers also note that a major snowstorm late in the month drove shoppers online rather than to the store.

U.K. multichannel retailers experienced a significantly better holiday shopping season than web-only retailers-13% growth for chains versus 8% decline for web-only merchants. “This shows both the high value consumers place on a multichannel proposition, particularly when it comes to gift returns, and the trust advantage high street brands have if they can get their online proposition right,” Parry says.

Interestingly, web-only merchants were more successful at converting shoppers to buyers in December: web-only retailers’ average conversion rate was 6.25% compared to 5% for chains, the trade group reports.

Along with the trade group’s index, several retailers among the 100+ members of the association reported results:

  • John Lewis Direct, the online operation of one of Britain’s largest retailers, reports 20% growth in December versus a year earlier. John Lewis launched a clearance web site on Christmas Eve. The site processed one order a minute in the first hour after launch. Momentum built over Christmas Eve and Christmas, with the day after Christmas, a national holiday in the U.K., producing the highest traffic ever for a John Lewis site, reports Jonathon Brown, head of online selling, John Lewis Direct.
  • Sales at Waitrose, a grocery unit of John Lewis, were up 95% in December over the year earlier. Waitrose eliminated delivery fees in the spring.
  • GettingPersonal.co.uk reports sales up 65% in December over a year earlier.
  • December sales at gifts and gadget retailer Firebox.com were up 31% from December 2008. “We saw our most profitable Christmas in Firebox`s 11-year history and order volumes were sustained from our peak on Dec. 7, when we made a record-breaking number of orders in one day, right up until Dec. 23, which is unprecedented,” says Christian Robinson, managing director of Firebox.
  • Prezzybox.com, also a gifts and gadgets retailer, reports 57% year-over-year growth in December, and a tripling of sales since Christmas.
  • December sales at garden retailer Dobbies.com nearly doubled over the year ago December.
  • Buyagift.com reported sales growth of 29% in December.
  • Electronics retailer PIXmania.com reported online sales increased 15% in December from a year ago.
The Interactive Media in Retail Group and Capgemini predict 13% growth for U.K. online retail in 2010.

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