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The unparalleled growth of online shopping over much of the last decade appears to be starting to level off as the internet has matured as a purchasing channel and emerged the centrepiece of an established multi-channel retail mix, according to the latest Transactis Home Shopping Index report 

The five-year rolling index, which is based on the transactions of 39 million customers across 205 home shopping brands, showed that online shopping growth had slowed to 8% in 2010, down considerably from its 20% rise in 2009, 35% increase in 2008, and 58% upsurge in 2007. Top-line figures for the first two quarters of 2011 showed that online purchasing growth had rebounded slightly to 14%, but this is still well below the rates of previous 'peak growth' years. This article is copyright 2011 TheWiseMarketer.com).

Online spending increased by an impressive 173% over the five years studied (2006 to 2010), encompassing fashion items, household goods, children's merchandise, gadgets, home furnishings and other products purchased through participating catalogues and websites.

The percentage of home shopping purchases made via the web increased from 21% in 2006 to 51% in 2010. This growth in web purchasing came during a five-year period in which overall spending across all home shopping channels climbed by only 14%, and actually fell in 2010 (down 0.9%) and 2009 (down 2.5%), suggesting a decline in catalogue orders as internet purchases increase.

The biggest growth in internet shopping over the five year period came from consumers aged 18 to 24, who spent 1,076% more online in 2010 than in 2006, followed by 25 to 34 year-olds whose web spending increased by 314%. During that time, total combined catalogue and online spending by consumers aged 45 years and over fell, while overall spending by younger, web-savvy consumers increased hugely, with those under 35 showing the most sustained growth, indicating a shift not only in channel preference but also in the overall demographics of home shopping.

The index's age demographic breakdown also indicated that there is less scope for future growth in online purchasing as the vast majority of those fuelling the boom in internet shopping (the youngest consumers) are already internet shoppers. The study found that 83% of home shoppers under 35 were already internet shoppers by 2010, making at least 80% of their purchases via the web.

However, despite figures showing a huge increase in internet purchasing and the growing value of the younger consumers who are gravitating toward shopping online, a supplementary study included with the report noted that multi-channel customers are far more valuable than those who use a sole purchasing point, including those who consider themselves 'online only' shoppers.

The research compared 250,000 multi-channel consumers with those shopping through a single channel, and found that those using a mix of channels made approximately 50% more orders and spent nearly double what single-channel buyers do. Even when single channel consumers migrated from 100% offline to 100% online shopping, they were still spending considerably less than those who continued to use multiple channels.

"These figures seem to confirm that, in total, home shopping has been hit by the economic uncertainty of the last couple of years while also undergoing a fundamental transition. But to say there has been a shift from mail order to web shopping is too simplistic," said Michael Green, director of insight for Transactis. "What we have seen is massive growth in home shopping by younger consumers, as those under 45 have vastly boosted their home shopping spend over the last five years and adopted the internet as their primary purchasing point. Meanwhile, those aged 45 and over are spending less overall on home shopping, with the total spending among over 75s contracting by nearly one third over five years, despite spending more on the web."

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