Is e-retail growth set to slow as much as predicted?

Online retail sales growth is set to slow dramatically over the next five years, according to Verdict, which reckons there will be little more than 12% per annum increases compared with the chunky 35% achieved over the previous 10 years. [see report by Internet Retailing].

How many fewer times will we be pressing this button?

Its report 'E-retail 2010 and Beyond' paints a worrying scenario for retailers who have been very reliant on this new channel as total retail sales have increased by a paltry 4.2% over the period 1999 to 2004 and by 1.8% between 2004 and 2009, according to Verdict figures.

The retail specialists are entirely correct to say that a slowdown in online growth will occur on the back of the numbers of people going online for the first time radically reducing compared with the previous go-go years - it reckons online shopper numbers will increase by only four million by 2014.

It is also factoring in a serious slowdown in the spending power of the most valuable online shoppers - the 35 to 44-year olds - as the tough economic backdrop starts to rein in their previously rapacious shopping habits.

However, things might not be quite as bad as the well respected research house is predicting. What it might be underestimating a little in its numbers is the increase in online sales that will be attributed to the growing spending power of the younger audience as they age.

For instance, there will be many previously non-earning youngsters beginning to spend online for the first time as they get jobs (the fortunate ones, that is). The effect of this ageing of an increasingly technology literate population will ripple across all categories.

It's greatest effect could be at the extreme end of the scale where the 55+ grouping will contribute significantly more to online shopping growth over time. Whereas there are many people in this bracket who currently do not shop online they will continuously be replaced over time by people who do shop online.

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Their numbers will continue to grow to the point where this age bracket is no different to any other. This must be music to the ears of Marks & Spencer (and its internet strategy) as its core shopper falls into this age bracket.

So although growth in online sales is clearly going to slow down it will be interesting to see whether the particularly bearish scenario painted by Verdict ultimately comes to fruition.