With 15 percent of retail spend being online during 2007 and the growth trend set to continue, ensuring efficient fulfilment of online orders is more important than ever.
Online shopping reached an all time high in the run up to Christmas 2007, with £15.2 billion spent online in October to December, according to the 'IMRG Capgemini e-Retail Sales Index'. This brought full year UK e-retail sales to £46.6 billion, that's up 54% on the £30.2 billion recorded for 2006.
Some retailers even attracted a significant level of business on Christmas Day 2007 itself while the high street shops were shut when four million online shoppers spent an estimated £84 million.
Furthermore, growth in online retail seems to be sustainable: over the year online increased its share from 10 p to 15 p of every pound spent in retail. With high street sales yet to decline, this growth comes at the expense of bricks and mortar retailers – a trend that's expected to continue.
The report suggests that retailers who have both a high street and an online presence seem to have done better than the 'pure-plays', so the multichannel strategy seems to be paying off as strong results from retailers such as John Lewis, who have spent time and effort revamping their website and addressing their supply chain delivery capability, demonstrate.
Anthoula Madden, Vice President at Capgemini UK's Consumer Products and Retail Team comments: “A 'joined up' customer experience across channels seems to be capturing the hearts and minds of consumers as John Lewis have demonstrated, with loyalty to the brand being part of the equation.”
He continues: “The latest stats from the IMRG Capgemini e-Retail Sales Index highlight the importance of a multichannel strategy if high street retailers are to compete effectively with their online counterparts. High street retailers have the benefits of brand recognition, robust delivery and distribution channels which can give them competitive advantage – they just need to ensure that they can offer consumers a multichannel experience to capitalise on the ever growing trend for online shopping.”
One company demonstrating once again that it is providing robust fulfilment operation for its clients is iForce. The UK's leading multichannel fulfilment company has a client portfolio that includes high street names such as John Lewis Direct, House of Fraser and Boots.Com together with innovative online operations such as SkinStore, The Great Little Trading Company and, as has been recently announced, The GadgetShop.
iForce's 2007 performance reflects the growth in the sector. The company reports a 69 percent like-for-like (ie, not taking into account new business commenced in 2007) increase in annual orders it fulfilled for the year 2007 compared to 2006. Taking new business into account, the company achieved a total increase of 74 percent in annual orders fulfilled by the company in 2007 compared to 2006, fulfilling a total of 2.6 million orders and packaging 11.7 million items.
During the 2007 October to December peak period, iForce achieved a 45 percent like-for-like increase in peak orders fulfilled compared to the previous year, with a total of 1.3 million orders fulfilled in this period – that's 53% up on 2006.
Mark Hewitt, CEO of iForce comments: “The like-for-like figures demonstrate our ability to scale our business to handle the strong growth of our clients while the increase in total orders demonstrates our success in attracting new business in 2007, not just from brand new clients like The GadgetShop but also from existing partners, such as John Lewis Direct, with whom we are we embarking on the exciting next step in online retail fulfilment with the help of a new and larger warehouse. Achievements such as these should encourage the many retailers who are looking to take the first step into the world of transactional websites to keep pace with their competitors.”