Airlines drive UK online spending

Warc, 29 May 2014

LONDON: Online spending by UK consumers is set to reach £107bn in 2014, with expenditure on airlines accounting for the bulk of that, new figures have shown.

Barclaycard, the credit card business, said online spending was growing at 11% a year and that this sort of transaction now made up one fifth of all credit card spending in the UK.

Airlines accounted for four fifths of web spending by UK consumers, driven by the rise of low-cost carriers and a move to e-ticketing. Barclaycard noted that already in 2014 the number of online airline transactions had risen 5.6% while spending, on an inflation-adjusted basis, was up 4.2%.

The fastest-growing category, however, was music, as spending on downloads leapt 124% in 2013; this format now accounts for 79% of all music sold in the country.

Spending on out-of-home entertainment was also rising fast, almost doubling in 2013 as more concerts and tickets were advertised and sold online. Just under half (49%) of all spending now takes place online; that proportion rises to 59% for cinema and theatre spending as consumers research shows and book online.

A category earmarked for future growth was DIY and garden centres, which had risen 37% from a low base as the housing market picked up.

Chris Wood, Barclaycard Managing Director, described online shopping as "an inextricable part of modern retail" and noted that it had become the main source of business in some categories, such as music and airlines.

"These sectors show it is vital for retailers to move quickly to keep pace with their customers' desire to shop online, where they can build deeper relationships and engage with customers, or they risk being left behind," he stated.

Separate data from IMRG, the UK's industry association for e-retail, showed that 45% of visits to online retailers and a third of all online sales now come from mobile devices, with men (64%) more likely to take this action than women (59%).

Andrew McClelland, Chief Operations & Policy Officer at IMRG, expected that not only would internet shopping become the norm within a few years but that the devices used would also change, to include, for example, smart watches and smart fridges.

Data sourced from Barclaycard; additional content by Warc staff