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Monday, 24 January, 2000, 14:37 GMT
A Merry e-Christmas for UK?

The Father Christmas choir Father Christmas remains biggest in home delivery


The last year of the second millennium was meant to mark the first true e-Christmas in the UK.

But then 1999 was also supposed to end with a computer bug ravaging businesses across the world.


There was lots of browsing and looking around to compare different items and prices at difference shops - and then a lot of buying at the high street retailers
Evan Rudowski, Excite UK


The Y2K computer problem turned out largely to be hype ... can the same be said about online retailing?

The first difficulty facing any serious examination of the issue is the reluctance of many firms to reveal the hard facts behind their e-commerce operations.

This is understandable given the fast growth of the industry and the desire not to give rivals any unnecessary help.

Of course, the more cynical may add, an air of mystery also fails to puncture the faith of share purchasers.

What we are left with are a few facts and figures plus studies and surveys from retail analysts, which vary in quality from the informed to those which appear to have plucked figures largely out of the air.

Half-a-million books

But given the scarcity of hard facts, they are the ones which tend to hit the headlines.

Among the best-known are retail analysts Verdict Research, who estimate that internet shopping will have accounted for 3% of UK retail sales in 1999 - equal to 581m.

It expects that figure to rise twelvefold in the next four years to reach 7.4bn.

By contrast, business advisers Ernst & Young believe that 695m was spent by online shoppers for Christmas gifts alone in the UK in 1999, up from 230m the year before.

It has also been reported that less than 1% of credit card transactions in the UK were online in the run-up to Christmas - suggesting that internet shopping was still a minority activity.

Trade research organisation BookTrack says online retailers such as Amazon sold a total of 490,000 books in the eight weeks before Christmas in the UK.

That may be dwarfed by the 30,800,000 books sold from traditional stores - but it is still a lucrative slice of the market, and one which is set to grow rapidly in the near future.

Europeans are more wary

A lot of hope and money rides on the UK following the rapid growth in online shopping seen in the US.

In America festive online sales are estimated to have more than doubled on 1998, to anything ranging from 7bn to 9bn - although even that is lower than the earlier estimates.

Excite UK's shopping channel Excite: Plenty of window shopping


One of those best placed to monitor the online market in the UK was Evan Rudowski, managing director of Excite UK, which includes a shopping channel which its users can visit to buy goods online.

The traffic to their shopping channel rose 400% between October and November, and by the same amount again between November and December.

Mr Rudowski believes that the UK is about a year behind the US in internet use, but closing the gap rapidly.

He added that Christmas 1999 also showed that there are clear differences emerging between the two markets at comparable stages of their development.

The main one is the greater reluctance of people in the UK and on mainland Europe to reveal personal details, including those of their credit cards, online.

This was one of the reasons that many shopping visitors decided not to buy.

"There was lots of browsing and looking around to compare different items and prices at difference shops - and then a lot of buying at the high street retailers," he said.

Fast growth for some

For some others there was phenomenal growth, albeit from what in many cases were very low bases.

Streets Online, owner of audiostreet.co.uk, gamesstreet.co.uk, dvdstreet.co.uk, said sales in December 1999 rose 20 fold on 1998. It got its 100,000th customer a fortnight before Christmas.

Unbeatable.co.uk chairman Clive Swan said that its sales rose to more than 500,000 in December, after topping 100,000 for the first time in October.

And highlights for lastminute.com included the sale of 66 rooms at a Sheraton hotel in less than four hours, and a 5,000 millennium package for the Dorchester Hotel sold on Christmas Eve.

Elsewhere there were signs that the UK's main high street retailers were set to follow the US trend in benefiting from a "clicks and mortar" strategy.

Arcadia, which includes Top Shop and Racing Green among its stable of stores, has seen its overall sales fall, but has continued to increase its online operations, recording four million page impressions at its store websites in December.

December 2000 - the UK's real eChristmas?

Meanwhile Iceland, the North Wales based supermarket chain which has pioneered home delivery in the UK, continued to see its online sales rise.

In the five days running up to Christmas Iceland made 133,000 home deliveries, including 20,000 which were ordered online. Its first online order of the New Year came at 4am on 1 January.

More detailed figures will follow in due course, but those available so far suggest that online shopping was not the dominating force in UK retailing at Christmas 1999.

However the sharp rise in its adoption has become one which few can afford to ignore. Particularly as many window shoppers will have gained the confidence to become hard spending consumers this year.

According to a survey of 1,800 households by Which? magazine, people who tried e-commerce generally like it.

Which found that one person in ten had made a purchase online in the three months through December. Of those, 87% said they would buy again over the web. And 58% said they got a better service than they did on the high street.

Those attitudes appears to have motivated retail groups such as Marks & Spencer and Tesco to embark on large scale expansion of their online presence.

They want to be ready for 25 December 2000 when, as they all know, the UK will be celebrating its first true e-Christmas.

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