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Christmas e-commerce boom beats expectations

Online retailers have had a happy Christmas, but there is still room for improvement
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Written by Tom Espiner, Senior Reporter on

Britain's online spending in the run up to Christmas has exceeded expectations, according to the global e-retailing body, Interactive Media in Retail Group.

Although December e-commerce statistics will not be available until 15 January, Interactive Media in Retail Group (IMRG) is confident that e-commerce activity over Christmas was significantly greater than forecast previously .

The e-retail body initially anticipated that UK online spending in December would total £3.2bn, but IMRG now expects that it could be as high as £3.7bn. This would be a 45 percent increase on December 2005.

"From talking to our members, my guess is consumers will have spent £3.7bn online just in December," said James Roper, chief executive for IMRG. "There's been a massive growth in wrapped gifts — year-on-year our gift service index is up 150 percent," Roper told ZDNet UK.

IMRG initially estimated that the total spend for the 10-week period leading up to Christmas would be £7bn, but has revised that estimate to £7.5bn.

Roper said that a big surprise had been the amount of electrical goods purchased online, with a 95 percent increase year-on-year. "Twenty-five percent of all electrical goods are now sold on the internet. Electrical goods are a commodity, so people will buy one as cheaply as they can," he explained.

IMRG believes that fears over internet security have not affected consumer confidence in online shopping. "As far as we're concerned, internet security is a ticked box — it's not a concern for the industry or customers, as payment sites are secure and customers are protected [from loss through fraud]" said Roper.

IMRG said that online spending has boomed thanks to the larger array of products and services available compared with previous years. However, Roper said there were still "huge gaps" in the marketplace, especially for luxury, high-end and specialist products.

Roper also said the delivery industry must enable customers to specify when they receive ordered goods, to encourage more customers to shop online. "The delivery industry really needs to get its act together. A large number of people still don't shop [online] at Christmas because they don't know when the goods will get to them. They could not be at home to receive the goods. If people could specify they want goods to arrive on Thursday morning, or Wednesday evening, we could avoid the vague black hole that it may turn up in the next few days. It's just not good enough," said Roper.

Online retailer Amazon recorded its best Christmas shopping figures ever in 2006, with a significant jump in sales compared to 2005.

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