Online Retail in the UK

Internet users grew to 82 per cent of the UK adult population in the final quarter of 2013, equivalent to 41.5 million users, according to the Retail Economics Online Retailing 2013 Report. In addition, the number of mobile internet users increased to 19.7 million, or 39 per cent of adults, from 35 per cent in the first quarter of 2013. The increase was driven primarily by growth in the number of smartphone owners, which reached 44 per cent of UK adults at the end of 2013, compared with 29 per cent the previous year.

Tablets also saw a sharp increase, growing from 1 per cent of UK adult users in Q4 2012 to 6 per cent in Q4 2013. Interestingly, laptop users continued to grow, while the number of PC owners fell to below half of the adult population 44 per cent, compared with 55 per cent in Q4 2003.

A growing internet user-base, across a variety of devices, has important implications for multichannel and online retailers, from both a sales and a marketing perspective.
Nearly 28 million UK adults used the Internet to purchase goods and services between October and December 2011 excluding Christmas sale shopping, the equivalent of 55 per cent of the adult population.

In addition, 5.7 million adults used a Shopping app on their smartphones 26 per cent of smartphone users, compared with 22 per cent in Q4 2010. Shopping apps represented 5 per cent of the app distribution, while Social Networking apps accounted for the largest proportion of users with 12 per cent of apps. However, out of those who downloaded applications to their mobile phones, over half downloaded a shopping app 53 per cent.

The penetration of mobile internet access has already had a notable effect on the retail sector. Shoppers are able to check product availability compare prices read reviews and use a variety of vouchers codes, discounts and promotions both on-the go and at home. Indeed, 42 per cent of adults who connected to the Internet outside of the home used a 3G connection on their mobiles or smartphones in the last three months of 2011. Moreover, the percentage of mobile users who accessed the Internet on their smartphones equally in the home and elsewhere increased from 49 per cent at the end of 2010 to 61 per cent at the end of 2011.That is, marketing and sales initiatives on mobile devices should be targeted both at on-the-go and at-home customers.

However, retailers can improve on this by paying closer attention to shopper profiles and trends. For example, although mobile internet users outside of the home accounted for 13 per cent of the lowest socio-economic group DE compared with 27 per cent of the top socio-economic group AB, those who accessed the internet primarily from their home accounted for 28 per cent and 17 per cent respectively. Indeed, 9 per cent of DE adults stated that 3G or wi-fi on their mobiles was their main form of internet connection in the home, compared with 6 per cent of AB adults. This implies that retailers can differentiate between at-home and on-the-go mobile promotions in order to capture a wider consumer base.

All things considered, combining a comprehensive marketing strategy with an efficient supply chain should create a seamless multi-channel and multi-media experience for consumers. This will allow retailers to capture crucial market share and to create a strong presence in an area still largely in its infancy.

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