Internet shopping soared almost 50% during the 10-week run-up to Christmas 2005, with British shoppers spending almost £5bn online, acccording to figures from industry body Interactive Media in Retail Group (IMRG).
IMRG says shoppers spent £4.98bn online in the run up to the holidays, compared with £3.33bn during the same period in 2004. Sales peaked during the week commencing 5 December when £653 million was spent online.
Jo Tucker, IMRG's MD who directs the IMRG Index programme, says a step change happened in retailing at Christmas and consumers have opted for the convenience and choice that online shopping provides.
The end-of-year surge followed a year of dynamic growth for UK online shopping, says IMRG, with the amount spent on goods and services online rising 32% to £19.2bn, compared to 2004.
A total of 24 million UK consumers shopped online in 2005, spending an average of £816 each during the year and £208 over the Christmas period.
Says Tucker: "There can no longer be any doubt that the Internet is a major part of the retail landscape, and that it will dominate the retail agenda for the next several years."
Internet sales are now thought to account for around nine per cent of all UK retail spending. The rise is having a knock-on effect on tradition retailers, with firms such as HMV and Waterstones complaining of weaker sales in the pre-Christmas period because more customers are choosing to shop via the Web.
IMRG forecasts that UK e-retail will grow 36% in 2006, and sales will be worth £26 billion for the calendar year. Shoppers are expected to each spend on average more than £1000 online for the first time in 2006.
However IMRG's CEO, James Roper, says a surprising number of goods are still either hard to find or unavailable online and large gaps exist in the supply market, such as high-end fashion and real estate.
"Even leading retailers often only make a small proportion of their total inventory available online, and many don't bother with spares at all. So huge growth potential remains for the merchants who plug these holes," he adds.