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Trevor Vagg, director, Kantar Media

The Pareto principle, or the 80/20 rule, states that a small number of causes will account for a disproportionate number of effects. This rings true for ecommerce in Britain. Our Internet Monitor study shows around eight in every ten pounds spent online can be linked to only a third of those who shop online.

Currently, online spend of £1,000 or more a year would bring you full membership of the ’big e-spenders’ club. However, you’d have to share the honour with almost 9m people.

Although the average amount spent online per consumer has shown little fluctuation in the past five years, the ever increasing number of shoppers has maintained the rising trend for overall ecommerce volumes. This growth has continued to be sharp in 2010, with a 12.5% increase to 27.1m adults in Britain spending a total of £6bn online (excluding business transactions) over the six months prior to the research. At that rate, the etail industry will be celebrating its 30-millionth shopper within a year.

Consumers looking for savings in the aftermath of the recession and the now widespread behaviour of sourcing information on the internet before making purchases offer part of the explanation for the surge in the number of online shoppers. Attitudinal statements back this up, with 41% of users agreeing they shop around online more because of the recession, and 67% often referring to the web before buying.

Undoubtedly, ecommerce is reaching an age of maturity. Online shopping is no longer just for books, DVDs and CDs. Products and services in more than 35 categories have been purchased by at least 1m online shoppers £6.8m buying insurance and 4.6m toys and games, for example. Furthermore, the almost universal presence of broadband has addressed most of the frustrations of the last decade, allowing consumers to take full advantage of convenient 24/7 online shopping.

Nevertheless, opportunities for significant growth remain. Ecommerce’s share of total spend is still relatively small, with the IMRG claiming online transactions account for 17p in every £1 spent in the UK. There are still 43% of adults who don’t buy online, and under-25s, most at ease with digital, have yet to reach their full spending power.

While the market is set to continue growing, brand owners should be aware that more market players, sophisticated consumers and ease of comparison will drive an even greater level of competitiveness.


Published 28 October, 2010 by NMA Staff

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