New devices drive online shopping boom

The increasing number of interactive devices such as digital TVs and mobile phones will drive the rate of online retail spending, according to Fletcher Research.

UK consumers will spend £1.7bn online this year with the figure rising to £20bn by 2005, predicts the research firm.

The emergence of wireless devices and interactive TVs will become valuable tools for the multiple stages of internet shopping, such as sales and customer services, said Fletcher in its report, UK Online Retail: From Minority to Mainstream.

Retailers will focus on providing an easy-to-use offering to their customers, concentrating on fulfilment, dynamic pricing and channel integration. Consumers will also increasingly expect a more customised and personalised service.

Shobit Kakkar, an analyst at Fletcher, said: "Personalisation and the utilisation of consumer data distinguish the best online retail offerings. Most sites track consumers using 'cookie' technology, but only a quarter personalise the user experience. Sophisticated navigation helps users find the right products."

Fletcher predicts that 7.5 per cent of the UK's retail sales will move online by 2005 - a rise from 0.25 per cent of all retail sales last year. Leisure travel and computer products are the most popular sectors, with the growing number of players intensifying competition, said Fletcher.

The online leisure travel market will be worth £490m by the end of 2000 and computer product sales will reach £410m. New players such as Jungle.com and Expedia will challenge the established companies like Dell and Thomas Cook.

"Early success stories such as books and computer goods will continue to show strong sales while others, such as groceries, emerge as new category successes," said Kakkar.