Online retailers see sales leap
Web retail spending now accounts for almost 50 per cent of total retail spend, analyst claims
Resellers with an online presence could be riding the crest of a wave, according to figures released from retail analyst Verdict Research, which claimed that online retailers accounted for almost half of the cash growth in retail spending last year.
Online sales increased 15 times faster than the retail average in 2005. Traditional retail spending grew by only 1.5 per cent compared with the 28.9 per cent growth witnessed online, although Verdict maintained that the online share of the retail sector is still small.
Nick Gladding, senior retail analyst at Verdict Research, which is part of the Datamonitor Group, said: “E-retail is redefining how consumers select retailers, enabling people to choose products that precisely meet their requirements. E-retail is empowering people to find the lowest price product and allowing them to shop at a time that suits them.
“This makes online retailers far more formidable competitors to high-street retailers than their current sales figures suggest.”
Verdict claimed in its report that online retailers are adding to the pressure that traditional high-street retailers are facing from a lack of spending, and that the impact of online retailers on the traditional retail sector goes beyond just sales.
The analyst stated that online players have played a “significant role” in pushing a third of the key retail casualties of 2005 towards administration.
The report cited the example of computer retailer Tiny, which became “unable to compete with prices driven lower by the likes of Dell”.
Stewart Hayward, commercial director at online VAR WStore, said the internet was the way forward for the channel.
“Any channel partner that doesn’t have a web presence in this day and age is mad. Resellers can offer the technical buyer a simpler and more efficient sale online,” he said.
However, Hayward stressed that a purely online VAR presence was not sufficient.
“Just being a stand-alone online reseller may not be the key, so a traditional reseller with an additional online presence enables it to cover all bases,” he added.