Cool Britannia Is Hot on eCommerce

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The perfect storm of eCommerce success flies the Union Flag. The UK continues its precipitous investment in digital infrastructure, boasts the world’s highest consumer confidence and percentage of online GDP. Citizens in the UK estimate eCommerce saves them a whopping ยฃ2,100 per year and continue to spend more money per capita than any other country in the world. Driven by food and apparel, gross online purchases are nearly three times higher, totaling ยฃ91 billion, than the second-largest online market in Europe: Germany.

Quick Facts: UK Online

25% of Britons use in-store pickup for goods bought online

High population density with increased prevalence of “click to collect” and in-store “click and reserve”

27% of online purchases were via mobile in late 2013–a whopping 100% growth rate year over year

82% of these sales were tablet–an increase of 186% year over year

Smartphone sales grew by 131% in 2013

UK leads Europe with four of the top 10 eCommerce sites by sales volume

Why is the UK’s eCommerce Environment so Robust?

It’s not just geographic size and digital infrastructure enabling the UK: Italy has a similar population and only slightly less connectivity. So what is so special about eCommerce in the UK?

Relatively low mobile rates for data likely drives the much higher rates of online time per consumer

Lower shipping costs. Partially state-subsidized flat rate shipping for domestic parcels

Returns culture. Free returns are commonplace, and the Distance Selling Regulations allow customers to return items within at least a 7-day window.

Smartphone penetration. The UK will surpass Norway as highest smartphone penetration in the world (75%) by 2015, up from 58% in 2012.

Plastic acceptance. Over 48% of retail sales are completed with debit or credit cards.

Owe you one, mate. And unlike their European counterparts, UK consumers have no qualms about using plastic (and taking on relatively higher personal consumer debt).

A culture of innovation. Let’s be honest: the Brits have a history of being really good at retailing. The best innovate and try new things all the time–whilst retaining their brand values. This is a powerful combination online as the boundary between offline and digital become ever less distinct, and continuous innovation remains the heart of capturing market loyalty at home and abroad.

Creating and Capitalizing on Opportunity

Language. English dominates as a second language in European countries, and for the time being anyway, remains clearly the dominant language of the Internet.

Location, location. There’s no doubt the UK links nicely between the US and Europe. It’s a bit of a cliche, but it holds true: bridging between the largest economies can provide an opportunity. But UK merchants execute on that opportunity and constantly move quickly to keep the edge in this ultra-competitive market.

The company you keep. Websites with the Union Jack instill higher consumer confidence in quality and service. And simply put, the Brits continue to build some of the best and most iconic retail brands in the world. And that’s not luck, mate.

UK firms have adapted to the online trend by heavily researching what works online in the pay-per-click and impression spaces. Conversion rates in the travel category (typically the lowest conversion rates by industry category) approach 5% in Great Britain, while the worldwide average is anywhere between 1.5% and 3% depending on device type.

Furthermore, British corporations like ASOS and Burberry deeply invest in mobile and online advertising–retaining impressive customer loyalty rates. Even US behemoth Amazon has their largest European presence in the UK, shipping items to the Nordic markets from their British hub.

According to IMRG, the UK has nearly 230,000 businesses with a significant Internet presence and has the largest online export totals in Europe. In 2013, retailers with an online presence grew 8% faster than their brick-and-mortar only counterparts. Growth from the entrepreneurship side is booming as well: small to medium sized online businesses stores are expected to double by 2015.

By any measure, eCommerce is hot in cool Britannia and with sustained innovation and drive, it should retain that edge for the foreseeable future.

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