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Ecommerce: The Driving Force in UK Growth

By James Harper on 24 November 2011 @ 1:41 PM.

Tags: ecommerce, etail, online retailers, internet fulfilment.

In the current global economic crisis many businesses are failing and some high street retailers report a drop in spending and sales overall. Although some stores are failing, according to the National Statistics Office, retail sale volumes are up 5.4% than October last year. The rise in the volume of sales may be largely down to the success of ecommerce.

While the general increase in demand may well be the fact that October is often the start of the run up to Christmas, there has, at the same time, been a growth of 11.7% in internet and mail order sales combined. Although incomes in the UK have either contracted or remained the same people are still spending for Christmas but many of them have switched to buying online.

The switch to online buying has meant a growth in the use of internet fulfilment services i.e. those companies that specialise in the home delivery of large and small products that have been purchased online. The fact is that though many high street stores may have reported a drop in income and sales, internet sales continue to increase. The rise of ecommerce services in the UK makes it the driving force in the growth of supporting companies.

Online retailers often sell products that are manufactured by other companies. When internet sales go up, this also helps to drive growth in areas like the manufacturing of goods and products and in internet fulfilment services. Many online retailers rely on specialist companies for the warehousing, picking and delivery of goods to customer’s homes. While the Office of National Statistics might include Ecommerce in its figures this is not picked up on across the board.

All too many public reports on the state of the economy focus on retail selling inshore and neglect sales that are not inshore. Most people’s incomes have either fallen or remained the same and an increasing number of them choose to purchase things online because they are often cheaper than similar items on the high street.

Buying online is cheaper because online retailers do not have the same overheads as a high street store. High street nationals like Next and Marks and Spencer, who sell both in the store and online have their own warehousing and delivery facilities. Online retailers not associated with national stores will often use a company that provides them with warehousing for their products and which also has a picking and delivery service.

Fulfilment services have been in operation for many years as they have matched the needs of mail order companies. Ecommerce has boosted business for warehousing and logistics companies as they need such services to keep their company running. Nowadays more people shop online not just because they can save money, but because they can also save time. If you are out at work all day and you want some time to relax at weekends, it makes sense to shop for things on the internet. Whether you are looking for new clothes, new furniture or Christmas presents for the family, it is generally cheaper and more convenient to buy these things online.