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New Research Highlights Surprising Facts About Online Retailing
Amid the boom in internet retailing, three surprising trends are highlighted today by leading market research company GfK.
1) Surprising products with more than 10% of sales on the Internet
There are many products where over 10% of all sales occur on the Internet, for instance MP3 players (20%), digital still cameras (18%) and smart phones (14%). However, there are many, less obvious, products which are also being bought in large numbers on the Internet:
- Breadmakers - 20%
- Coffee grinders - 12%
- Dishwashers - 10%
2) Higher average spend on the Internet
The Internet allows consumers to become more price conscious than ever before, for example though price comparison websites. Consumers appear more likely to purchase high spec items on the Internet, in the knowledge that they are getting a better deal. An example of this is Plasma televisions, where there is a marked difference in the average spend on the Internet compared to the high street - £1800 and £1350 respectively.
3) Faster product lifecycle
The Internet effectively commoditises a product - enabling it to be simply assessed on price and function which leads to a faster product lifecycle. For instance GfK's price index comparison for a digital camera sold on the Internet versus the High Street. From an equal high street and Internet launch price in March 2005, the price on the high street had fallen by 16% by April 2006. However, the price on the Internet had fallen by 22%.
The implications to those retailers looking to cash in on the boom in Internet retailing are clear. Kervin Henry, Business Group Director at GfK, said: "Increased consumer access to high speed broadband Internet services, provides both an opportunity and problem for Internet retailers. This channel is likely to continue to increase in importance, but the decreased product lifecycle on the Internet means the key to survival means getting the product and price mix absolutely right." 29.05.2006, The GfK Group
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