Shoppers abandon 'old fashioned' mail order to go online

Internet shopping overtook purchases from mail order catalogues for the first time last year. The domination of "big-book" buying has been replaced with online retail therapy, according to market analysts.

Internet shopping overtook purchases from mail order catalogues for the first time last year. The domination of "big-book" buying has been replaced with online retail therapy, according to market analysts.

News of the mail order decline came as the retail group Littlewoods announced it was cutting 3,200 jobs and shutting 126 of its Index catalogue-based shops.

Britons now spend more than £800m online every month, on everything from cut-price books and CDs to top-end furniture and diamond jewellery.

A report by market analyst Mintel found that in 2004, more than one in three people (32 per cent) had bought something via the internet, compared with just 9 per cent in 2000.

During the same period, the number of people buying from a mail order catalogue fell from 53 per cent to just 25 per cent.

Low prices, instant availability and the chance to shop on the Net during office hours have added to the lure of online buying, while 1,000-page catalogues offering weekly repayments are now seen as "old fashioned and downmarket", according to the report.

Richard Perks, director of retail research at Mintel said: "Mail order has failed to change or diversify sufficiently to appeal to today's more demanding and sophisticated home shopping audience. Home shopping retailers must admit that the days of the big book are over and the great hope of the home shopping industry is, or should be, the internet." He added: "The big book is the wrong format for the 2000s, as customers want a more clearly targeted offer. Much the same has happened on the high street where the 'all things to all women' retailer has struggled and struggled badly.

"Both high street and home shopping retailers need to be much more clearly differentiated these days."

The internet shopping boom has underpinned a 10 per cent increase since 2002 in the number of people doing some form of home buying.

Interactive television shopping is also on the increase as the couch potato generation becomes increasingly adept at bringing the high street to their own homes.

Research by the firm Retail Decisions found that over Christmas, the number of people intending to buy presents by interactive television rose from 2 per cent to 5 per cent. Tesco online and the QVC shopping channel are among the biggest hitters in the booming online market.

Another survey, by the broadband provider Pipex, found that people who buy online spend an average of £127 a month on goods. A quarter of all men now buy their music online, compared with 17 per cent of women.

Experts say that "silver surfers" are also among the best internet buyers, with people over 50 now accounting for one in five new customers to the Tesco online grocery site.

Britain, Germany and France account for three-quarters of all sales in the European home shopping market as a whole, with only Austria beating the UK in terms of online buying.

The slump in catalogue shopping was highlighted by yesterday's announcement by Littlewoods that it was shutting 126 Index stores and selling the remaining 33 to the US retail giant GUS. The chairman, David Simons, said Index had accumulated losses of more than £100m and all attempts to revive its fortunes had failed.

Last year, the Innovations catalogue, famous for its gadgets and gizmos, was forced to close after a slump in sales.

The mail order catalogue market currently accounts for 3 per cent of all retail sales, and this figure is expected to fall to less than 2 per cent by 2009.

The facts

By James Sturcke

* The earliest merchants to capitalise on catalogue selling were printers. Among the first is thought to be Aldus Manutius, a Venetian merchant in 1498.

* Mass mail-order became possible with 19th-century advances in postal services and mass-produced goods.

* In 1845, Tiffany & Company of Fifth Avenue, New York, published Useful and Fancy Articles, offering imported goods from Europe and China.

* Mail-order firms have struggled since the arrival of internet sellers such Amazon. But Argos, founded in 1973, reported sales of £3bn last year.