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Online Sales Taking 20 Percent of all Credit and Debit Card Spending in the UK

Mobile Commerce Insider Featured Article

May 27, 2014

Online Sales Taking 20 Percent of all Credit and Debit Card Spending in the UK

By Michael Guta
TMCnet Contributing Writer

According to The Guardian the first e-commerce was a dubious one. The transaction took place in 1971 or 1972 between students at Stanford University's Artificial Intelligence Laboratory and Massachusetts Institute of Technology using ARPANET to arrange a sale for marijuana. That was the seed—no pun intended—responsible for the billions of dollars in commerce taking place today on the Internet. As legitimate e-commerce celebrates its 30th anniversary this month, a new report by Barclaycard says consumers in the UK are increasingly opting to do their shopping online.

In the report, Barclaycard revealed more consumers are using their debit and credit cards for online shopping now more than ever. Online spending increased by 11 percent a year, accounting for 20 percent of all retail sales in the UK and totaling £107 billion ($180 billion) or £4,000 ($6,743) per family. The country's industry association for e-retail, IMRG, supports the data, highlighting the growth is driven by mobile devices.

According to IMRG, mobile devices, such as smart phones and tablets, now account for nearly half or 45 percent of visits to online retailers, with a third of all online sales coming from these devices.

"Today’s consumers are just getting to grips with the opportunities that technology brings to their everyday lives. Everything from booking a taxi to buying a car can be done through digital channels," said Andrew McClelland, Chief Operations & Policy Officer at IMRG.

The Barclaycard report shows growth across all different sectors, but music downloads is the fastest growing category of online spending. The market grew by 124 percent last year and today 79 percent of all music is purchased online in the UK.

Airline ticket purchases ranks as the top spot for online spending at 80 percent. The industry has been extremely proactive in developing consumer friendly e-ticketing solutions since the early days of e-commerce. This has resulted in more consumers using this platform to book services for their entire traveling itinerary. So far this year, the number of airline transactions has been up 5.6 percent with total spend up 4.2 per cent on an inflation-adjusted basis. Entertainment industry has also embraced this technology and is reaping the rewards of e-commerce.

Tickets for entertainment, such as concerts, have almost doubled, with 49 percent of all spending now taking place online. Movie theaters have also experienced higher online spending with 59 percent of all tickets being purchased online while consumers are researching movies.

"Online shopping has come a long way since it first emerged in 1984 and now accounts for one in every five pounds spent on credit and debit cards in the UK. More and more of us are turning to the web to research, compare prices and buy everything from cinema trips and electronics to the latest fashions, making it an inextricable part of modern retail," said Chris Wood, Barclaycard Managing Director.

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