UK's ecommerce boom can prove a lifeline out of the downturn

18 December 2008

“Ecommerce is a vibrant and growing industry and will certainly be integral to the rebuilding of the economy”

History tells us that during economic slowdowns, winners get ahead. The performance gap between the most successful companies and their competitors actually widens during these periods.

Despite the economic climate, brands such as Asos and Net-A-Porter continue to grow online through good customer service, user-focused websites and improving the shopping experience by making checkout and delivery as efficient as possible. Asos recently reported that sales over the last two months had more than doubled, having increased by 107% in the six months to October. Meanwhile, brands such as Mothercare and O2 are making the most of the cost-effective and quantifiable nature of search and digital marketing to boost their online stores.

As the downturn bites, changes in consumer behaviour will accelerate — our UK data for Google already reveals huge uplifts in searches for safe savings, money-saving vouchers, special offers and cheap entertainment. Operating in the leading ecommerce market in the world, UK businesses are in a prime position to understand today’s consumer and speed up in a slowdown.

The UK’s population is one-fifth the size of the US’s but it has 60% of that country’s ecommerce spend. In the first half of 2008, 18.5% of UK media spend was directed online, more than double the amount directed online in the US. The UK internet population is 70% of the total population and growing. People here spend more time online than in any other European country, averaging 33 hours a month.

As consumer behaviour changes rapidly, it throws up sophisticated challenges for the UK market. For example, how can marketers make the best of their spend when they consider 61% of UK consumers with broadband watch TV and go online at the same time, at least twice a week? Or respond to the fact women spend more time online than men in the 18-34 age group? And how do we deepen our understanding of the relationship between digital and traditional marketing?

The UK is at the online frontline. It’s up to agencies, advertisers and media owners here to continue to innovate and experiment in this space. Luckily for us, online marketing is cost-effective, dynamic and very measurable, and should allow us to answer some of the questions posed by the digital consumer. Ecommerce is a vibrant and growing industry and will certainly be integral to the rebuilding of the economy after the first downturn of the truly digital age.

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