UK tops charts for online spending
The people of Britain have once again embraced Online Shopping; 2015 saw the UK spend $500 more than second place Norway per household, the BBC reported. The final figure of 2016 saw £154 spent in the UK; on average, each household spent £4,611 using payment cards online. In contrast, 2014 saw the UK spend £120 billion online, showing an increase of 28%.
It would appear the continued effort from companies to streamline online payments, as well as the increasing competition between delivery services, has encouraged more and more consumers to part with their hard-earned cash through online transactions.
Making up a quarter of all online card purchases in 2015 was entertainment: over half of all cinema tickets were purchased online. However, food and drink remained strongly tied to the high street. Bricks and mortar stores saw a 41% share of card purchases for food and drink, with only 7% using online card payments.
Consumer habits for items such as women’s clothing have indicated that purchasing confidence is much lower when buying online; of the 1000 people surveyed by Savvy Marketing, 63% of consumers had returned women’s clothing. Many retailers offer free returns for purchases, resulting in a substantial loss that, as the BBC notes, ‘had to be recovered somewhere or they risk going under’.
Will Contactless Payment Drive Customers Back to the High-Street?
Interestingly, July 2016 saw contactless payment pass £2 billion mark for the first time, perhaps indicating a resurgence in high street purchases. Tami Hargreaves, commercial director of digital consumer payments at Barclaycard, told the Guardian:
“Brits are turning to these payments for all types of purchases, from a supermarket top-up shop to stocking up on everyday essentials in discount stores and pharmacies.”
The limit of contactless payment currently sits at £30 per transaction; this figure results in many high-street brands being priced out of the innovative payment method.
So, is the limit set to increase?
What will Brexit mean for Ecommerce?
Although the UK has not yet left the European Union, the impact of Brexit is already being felt. Consumer price inflation rose to 2.3% from the 12 months through March, meaning Brits will get less for their money when shopping on non-UK based sites. Although the British economy may be slowing, strong currencies from around the world are certain to take advantage of their new position of strength in relation to the pound.
North American retailers, the most popular country for non-domestic online purchases in the UK, have expressed some concern at the impact the UK’s exit from the EU Free-Trade zone will have on their sales. The complexities of new trade regulations may result in companies turning away from UK consumers. Until the final deal has been negotiated, companies looking to sell to the UK’s large group of online consumers will have to remain flexible.
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