News & Views - Savantor

E-commerce and the increase in online spending

Sunday, 16 April 2017

Figures released by the Office for National Statistics show e-commerce is an area where consumer usage continues to grow. The number of adults buying goods or services online in 2016 increased to 77%, up from 53% in 2016. This increase has been fuelled by the use of mobile devices, in particular smartphones, which accounted for over half of online sales in the UK, up from 26% in 2013.

According to a report recently published by the UK Cards Association, online spending accounted for 26% of total card expenditure in December 2016, with 12% of the number of sales made by payment card as a proportion of total card purchases. Over the last two years, the volume of online sales grew by 42% compared to 23% for total card expenditure, whilst the value of online sales grew by 28% compared to 13% for total card expenditure.

In total, 1.8 billion online purchases worth £154 billion were made in 2016, showing a significant increase from the figures two years previously when 1.3 billion worth £120 billion were undertaken. It should be noted that these figures do not include online purchases at online retailers, such as Amazon, Google and iTunes, who process their transactions outside of the UK.

There are a number of factors which can be seen to be driving this growth: whilst an increase in consumer awareness and acceptance of the internet as a purchasing tool has played its part, the choice of services and ease of use of retailer websites are evolving and improving continuously. The introduction of various technological developments – ranging from digital wallets to one-touch payment functionality or links from social media websites – has also helped drive the increase. Omni-channel retailers offering services such as ‘click and collect’, as well as marketing initiatives such as Black Friday and individual retailer promotions, can also be seen to be driving online spending.

Whilst e-commerce is apparently the fastest growing retail market worldwide, the UK leads the way in Europe with the largest e-commerce market and, globally, with the highest online spending amount per household. The report issued by the UK Cards Association shows that the UK ranks as the third largest economy following China and the United States in terms of total value of online sales.

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