Net boost for home shopping

BUYING OVER the Internet and television is transforming home shopping, leading the sector towards dramatic growth after years of long-term decline, according to a report out today.

Verdict, the retailing research firm, says that multi-channel retailing - where stores exploit traditional retail sites, form joint ventures with direct sellers and set up new on-line facilities - is the way of the future.

This is reflected in a trend that has seen Tesco, Woolworths, Debenhams and Arcadia establish links with catalogue companies. These deals, Verdict says, are about adding value as a means to spur consumer loyalty rather than just selling at the lowest price.

The new buoyancy of the home-shopping market contrasts with the tough trading conditions facing traditional retailers, as demonstrated by the profits downturn of retailing giant Marks & Spencer.

In 1998, as total British retail spending rose by a meagre 3.8 per cent, home-shopping sales increased 7.2 per cent. Internet and TV sales volumes soared 41 per cent, but from a very low base. Electronic shopping, Verdict believes, will grow fast over the next four years but will still only account for 2.5 per cent of total retail sales in 2003.

"The attractions of multi-channel retailing are becoming compelling, with stores, catalogues, home delivery, TV and Internet increasingly seen as opportunities rather than threats to established retail businesses," said Richard Hymn, a Verdict analyst.

Among home-shopping operators outperforming the market, according to the research firm, are Empire, Betterware and QVC, while Littlewoods, N Brown and GUS are putting in a credible performance.

Verdict's survey follows the recent launch of Britain's first on-line retail price-checking service, PriceOffers. Located at priceoffers.co.uk, the Internet site's initial focus is food, drug and beverage retailing. Selected items from big supermarket groups are listed as are items from Oddbins and Boots.