Superfast1 broadband is boosting e-retailing and could result in a £740 million uplift in annual online spending once the roll-out across Britain is completed. The study for Royal Mail revealed that across the UK, online shoppers have increased their annual spending by £225 million since taking up superfast broadband. This equates to an increase in spending of 3.1 per cent, or £23 a year, per superfast broadband user.
Online shoppers in Scotland and Wales have increased their spending the most since receiving superfast broadband
The analysis by the Centre for Economic and Business Research found that an additional £515 million could be added to online sales annually once the roll-out reaches the target of between 90% and 95% of the population by 20172. This would take the total increase in online shopping to £740 million each year.
Impact of superfast broadband across Britain
The impact of superfast broadband roll-out on online sales varies significantly across the UK. Online shoppers in Scotland and Wales have increased their spending the most since receiving superfast broadband, at 5.1% and 4.4% respectively. This coincides with lower population densities in those parts of Britain (68 and 148 people per square km, compared with 407 for England) meaning distances from large shopping centres are likely to be greater and hence internet shopping more convenient, the report found.
Meanwhile, the South West of England experienced the lowest average increase at 1.4%. The South West has the highest average age of residents in the UK, and these findings may reflect lower comfort levels with online shopping among those in older age groups, said the study.
Edinburgh sees greatest growth in Britain
The study found that shoppers in Edinburgh are estimated to have increased their online spending by £4.4 million since getting superfast broadband, the highest rise of any local area in Britain. The Scottish capital beat Birmingham into second place and Glasgow into third. Cardiff and Croydon followed in fourth and fifth place in the table of local authority areas which saw the greatest increase in spend by individuals as a result of taking up superfast broadband.
Nick Landon, Managing Director of Royal Mail Parcels, said: “Royal Mail’s study shows that the investment in superfast broadband networks is having a positive impact on spending online. Superfast broadband is acting as a catalyst, encouraging people to spend more online and the further roll-out of networks across Britain over the coming years can only benefit the online retailing market.
“To support the online retailing market, Royal Mail is continuing to explore ways to improve our flexibility and provide more options for people to receive items they have ordered online.”
Nick Landon, Managing Director of Royal Mail Parcels
“To support the online retailing market, Royal Mail is continuing to explore ways to improve our flexibility and provide more options for people to receive items they have ordered online. At the end of June our express parcels business, Parcelforce Worldwide, began delivering seven days a week when it launched Sunday deliveries. Royal Mail is to pilot Sunday afternoon opening at around 100 of its delivery offices across the UK. Royal Mail will also trial Sunday parcel deliveries later this summer to addresses within the M25 motorway.”
1 Superfast broadband is defined by Ofcom as being Virgin Media Cable, Openreach fibre-to-the-cabinet or Digital Region Networks.
2 73% of the UK population had access to superfast broadband in 2013 (Ofcom Infrastructure Report, 24 October 2013).