UK home shopping has moved online – Mintel estimates that e-commerce accounted for 70% of all retail spending from home in 2008. But, the online channel is currently dominated by store-based retailers – the leading grocers, plus the likes of Argos, DSGi, M&S, Next, and John Lewis. Collectively, their turnover is twice the size of either pureplayers or other distance sellers’ (ie catalogue, direct or TV sellers) online sales.

E-commerce will increasingly become the lead channel for the traditional home shopping operators, especially the catalogue retailers. Indeed, that is already the case at Shop Direct Group, Otto UK, Redcats, and many specialist catalogue brands like Boden.

Teleshopping company QVC’s online sales are also growing, although not as rapidly as the mail order sector. However, TV shopping as a business model is struggling to grow in the UK.

E-commerce does seem to work well in conjunction with a catalogue, stores or both. Multichannel, particularly with stores, is a convincing model. But, with the notable exception of Argos, and to some extent Tesco and Next, there is some way to go before retailers achieve that desirable mutually cohesive and supportive structure across channels. Using stores as a collection point is comparatively straightforward, but as a returns point it is much more complicated.

Despite all the talk of multichannel, the potential of the pureplay model should not be underestimated. It is a cleaner model with no legacies and no dual running costs, and the sector tends to boast the more cutting edge websites. However, their biggest challenge is getting noticed and word of mouth recommendation is likely to be key.

Main themes

What impact will the current economic climate have, and what are the implications for home shopping operators?

How is today’s home shopping market made up and how have the component parts performed?

What does multichannel retailing really mean and what attributes make a strong player?

Can pureplayers compete with the multichannel model?

How and what people buy from home and why?

What are the wider market drivers?

How are changing demographics likely to impact on the sector?