For the first time since records began, eCommerce profits are in recession in the UK. Up until October online sales had been in constant growth. Experian division Hitwise said UK internet traffic to online retailers fell 0.5 per cent in October compared with the same month in 2007, suggesting the consumer spending downturn has begun to affect the previously fast-growing online sector.
However, there have been some gains. The budget travel and holiday sector has seen an increase in sales, as has the second hand market. Although eBay has issued warnings for profits and growth, there does appear to be an overall increase in demand for places to advertise and sell used items.
UK Internet visits to budget travel providers, such as EasyJet, Ryanair and Travelodge, increased by 5.3% between September 2007 and September 2008, while the websites of Cruise companies experienced an 8.2% increase in traffic over the same period. Hitwise reports
Searches for second hand items increased 22%this year
UK Internet searches containing the words ‘second hand’ increased by 22% between the weeks ending 13 October 2007 and 11 October 2008. During the 12 weeks ending 11 October 2008, UK Internet users searched for over 22,000 distinct terms containing the phrase ‘second hand’ with searches for ‘second hand cars’ proving to be the most popular.
Top five UK Internet searches containing ‘second hand’:
- second hand cars
- second hand books
- second hand car prices
- second hand furniture
- second hand bikes
Another area that has seen an increase in demand during the last year are searches for “sales” and “vouchers”m which indicates that a growing number of people are looking for bargain and discounts online. Some established websites, such as LatestDiscountVouchers.co.uk, have seen rises in traffic from customers as well as more offers being made by retailers that are striving to keep cash flowing during the economic downturn.
Although the online retail market is becoming more competitive, there have been no major upheavals so far. Here are the current top 20 online retailers in the UK:
- ebay.co.uk
- amazon.co.uk
- argos.co.uk
- play.com
- dell.com
- ebay.com
- tesco.com
- marksandspencer.com
- amazon.com
- gumtree.com
- next.co.uk
- euro.dell.com
- ebaymotors.co.uk
- direct.tesco.com
- hotukdeals.com
- asos.com
- currys.co.uk
- ticketmaster.co.uk
- johnlewis.com
- hmv.com
Gumtree.com is a growing second hand retailer, which is getting close to rivalling the giant eBay. However gumtree’s approach is different, in that it offers free classified adverts. It started as a London free ads website, but has grown to cover 6 countries. Main focus is on flat / room sharing, and provides an invaluable resource to students.
Amazon continues to diversify and innovate to increase traffic to its store. In the last year there has been a huge increase in the use of its aStore technology to increase trade. aStores allow websites to build mini shops on their sites, to advertise Amazon products directly, and range from specific stores such as health and fitness aStores, to general stores such as the GBPShop.co.uk.
Like with the banking sector, it is possible that online retailing will see some major upheavals if the credit crunch deepens and consumers are forced to tighten their belts further.
