What does online sales growth mean for your business?

Retail Week Prospect's league table of the largest retailers by UK online sales shows Amazon continuing to dominate with an estimated £4,900 million of UK online revenue in 2015/2016. Next in line was Tesco with an estimated £3,100 million of UK online revenue in the same period.

A recent report from e-commerce analytics firm Profitero showed that around 21% of UK consumers had bought alcohol online, behind only China with 27% and Japan with 22%. This was against a global average of around 8%. Even the logistical headaches of shipping heavy, fragile bottles through the UK's variable postal and courier services seem to do nothing for the UK's thirst for such online purchases.

So what is it that particularly attracts UK consumers to shopping online?

Reports show that a number of factors are driving growth, including the expansion of retailer click-and-collect and home delivery services, the emergence of new online buying platforms and the convenience of choosing products online as compared to visiting stores. This, coupled with an increasing number of more tech-savvy consumers reaching adulthood, will doubtless see online sales continue to increase.

To the detriment of the average high street, most businesses, large and small, now have an online presence. But with that comes some additional legal considerations that all businesses with an e-commerce side should be aware of, for example:

There have been significant changes in consumer protection law in the last few years including some new legislation, in particular:

  • The Consumer Contracts Regulations 2013
  • The Consumer Rights Act 2015
  • The EU Directive on Consumer Alternative Dispute Resolution (which came into force in 2016)

Because of this, a lot of websites will need to be revised in terms of:

  • The information they give to consumers
  • Their cancellation/returns policies and procedures
  • The way they deal with disputes

The General Data Protection Regulation (GDPR), which the government has confirmed will apply in the UK from 25 May 2018 irrespective of the UK's decision to leave the EU, is likely to change the legal framework in terms of requirements on those who have day-to-day responsibility for data protection.

These areas, coupled with other policies that need to be put in place and kept updated, for example privacy policies, cookie policies and website terms and conditions, gives businesses with an e-commerce side a lot to keep on top of.

What does all this mean for your business?

It is clear that even the least-shopped categories in e-commerce have tremendous potential and are likely to be responsible for an increasing slice of the profits of many businesses in the short to medium term.

However, inevitably the regulation around e-commerce continues to be revised and tightened, which means that businesses need to keep their policies and practices under constant review.

For more guidance as to the factors that you should consider in the context of your business, please contact Karen Ozdamar or another member of our Retail and Leisure sector.