According to Verdict (2005) almost 10% of books sold in the UK are now bought over the Internet, with close to 11% of CDs and DVDs now bought online. Furthermore, white goods are becoming increasingly popular to buy online, with Internet sales now accounting for 6.6% of the market and online shopping continues to grow. UK retailers are expecting online shopping to rise by between 23% and 40% for Christmas 2005. Independent Media in Retail Group, a body that represents online stores, estimates that this will be overall 9% of retail sales at Christmas, as consumers increasingly order from home to avoid trudging around the shops. The winners in the online product categories are electrical goods. IMRG estimates that 20% of electrical goods will be sold online at Christmas compared to zero five years ago. The reason is thought to be that electrical goods are bought by brand name and model number, with little differentiation between stores other than price. Major high-street chains such as Dixons, Argos and Comet, which operate e-retail sites, are forced to keep prices low if they want to compete online with e-retail specialists such as Dabs, Empire Direct and Dell, which have no shops to support and therefore can often undercut their high-street rivals. However, online specialists, whilst developing their market share are struggling to sustain levels of profitability because although the volume of sales continues to rise, prices of new technologies such as digital cameras and flat-screen televisions are falling. At this point high-street retailers are able to fight back by offering greater levels of customer service, peace of mind through being well-known brand names and greater levels of after-sales support.
Source: Adapted from Butler (2005)
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