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Web 2.0 is Propagating Retail 2.0 in the UK

July saw a massive spike in online consumer sales, up 80 percent on last year to a new all-time high. The IMRG Index burst above 4000 for the first time (4111), indicating that UK e-retail sales had exceeded 4 billion pounds in a month. Sales for the month were also 1.86 billion pounds higher than in July 2006.

In the high street, the average value of weekly sales in July was 5 billion pounds, 3.3 percent higher than July 2006, according to National Statistics. Online, the highest sales growth was in electrical goods (consumer electronics) -- the IMRG Electrical Index recorded sales 102 percent higher than a year earlier.

Pixmania's Ulric Jarome, MD France & Northern Europe, explains why. "June and July are key months for sales of electrical products on the internet, as people buy electronic items for their summer holidays -- Digital Cameras, MP3 Players, and Laptop Computers. Since the beginning of the year we have seen that confidence in internet shopping has reached a very high level in the mindset of consumers."

"Our feedback shows that most UK customers are now coming directly to our web shop without first looking around in high street stores. The reality is that online retailers are able to secure more aggressive prices for their customers -- this along with the vast quantity of product information available online and the ease of the buying process that avoids having to queue in stores is the winning mix of a smarter way to shop."

"Shoppers recognize that most internet sites are becoming more and more professional, trying to get the best of the offline experience online. This reality is directly reflected in our UK conversion rate (sales divided by number of unique visitors), which has increased by 59 percent from last year."

Major new e-retail resources have become available since last July, such as new or updated websites with greatly expanded product ranges. Many Index participants also report rising numbers of new customers as a result of the still strong uptake of domestic broadband, and because existing internet shoppers are expanding their online buying activity as they become more confident in using the channel.

July's 80 percent year-on-year Index growth is in stark contrast with the average for the preceding 12 months, of just 36 percent, and builds on an accelerating growth trend observed throughout 2007. Looking back, annual growth in July 2006 was 35.4 percent, while in 2005 it stood at just 25.3 percent.

Interactive Media in Retail Group (IMRG) chief executive, James Roper, commented "July's extraordinarily strong market growth spotlights the high level of consumer demand, and yet we are really only just beginning to see basic facilities arriving, and still have nowhere near enough capacity to meet shoppers' appetite for e-retail -- especially in areas such as parcel delivery, where huge improvements need to be made."

"With nearly half of UK homes yet to acquire broadband, and massive potential for improvement available in every aspect of it, strong e-retail growth is set to continue for many years to come. Web 2.0 is propagating Retail 2.0."

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