Credits card companies benefit from new technology

16th January 2012  

The UK is home to some of the most incredible technological inventions of the 20th and 21st Centuries. The Internet, in all its many wondrous forms, was a distinctly ‘British’ invention, and we Brits love our technology. Now, those habits are transforming the way we shop, according to a survey on global shopping habits by KPMG.

According to the report, British shoppers are embracing new technology at a faster pace than many other countries. A whopping 77% of those questioned prefer to buy leisure goods such as CDs, DVDs, books and games online (as opposed to in stores), compared to 65% globally.

This gradual but marked switch in shopping habits is playing nicely into the hands of the credit card issuers, who are seeing a surge in the number of credit card transactions. Where consumers would often have paid in shops or department stores using cash or cheque they’re now using the credit card because they’re shopping for the goods online.

When it comes to online banking however, it seems that British consumers are a little more reluctant to type in their account details, for fear of phishing or cyber attacks. There’s still a way to go in persuading the public that online banking is a safe alternative to traditional methods and that their fears over privacy and data security are relatively unfounded. But the report suggests that we are increasingly dependent on modern technology to dictate our everyday buying habits.

What do other consumers think?

Social media platforms are also becoming increasingly important in shaping the way people shop online. The survey questioned 9,600 people aged between 16 and 65 in 31 countries. The vast majority of those asked said that they looked at social networking sites such as Twitter and Facebook, as well as online reviews, before making a purchasing decision. It seems that the retailers need to place much more importance on this growing phenomenon if they are to persuade an increasingly savvy buying public to purchase their goods.

The biggest online buy was apps for mobile devices, with 88% of respondents saying they had downloaded an app onto their mobile. In the UK, a massive 74% said that they were more likely to buy flights and holidays online – an ominous note for high street travel agents and possibly one of the factors involved in the recent announcement by Thomas Cook to close many of its high street outlets.

Every cloud has a silver lining

But while we’re happy to buy everything from holidays in Turkey to the Christmas turkey online, we’re still suspicious in the UK when it comes to storing our data in the ether. Consumers don’t like the idea of their credit card details floating ‘out there’ in the Cloud, with the majority preferring to store their data on their computer hard drive rather than online. Surprisingly only 27% of UK respondents said that they had used mobile banking in the last six months, compared to 52% globally.

This year’s post-Christmas sale bonanza is also set to benefit online traders and credit card companies rather than the high street, despite huge price reductions that try to tempt shoppers out to the physical stores. Enthralled by the prospect of sitting at home with a cup of tea and shopping online rather than face the crowds, it could be that we’ve reached a tipping point in the way we shop. It is going to be very difficult for the high streets to force any kind of comeback, when online shopping has been so widely embraced by the buying public.

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