A total of £68bn was spent online during the year, according to the e-Retail Sales Index, which is an increase of 16.5 per cent compared with 2010.

So what are the challenges retailers face this year to ensure their online sales grow?

Even though the idea of multichannel retail is not new, retailers still have their work cut out in building a multichannel strategy.

“Retailers have to implement technology into existing stores to become multichannel,” he said, citing technologies such as smart screens, in-store tablets and the use of near-field communications (NFC) technology for contactless payments.

Effectively embracing a multichannel model is all the more important given that online-only retailers are gaining ground on multichannel retailers year on year.

Multichannel retailers saw growth of 25 per cent in the first half of 2011 but growth was only 14 per cent in the second half of the year, compared with online-only retailers which saw growth of 11 per cent in the first half of the year and 13 per cent in the second half.

This reflects a trend among consumers who are leaning towards the lowest cost option over the ease and familiarity of a high street brand, according to IMRG and Capgemini.

One retail channel that is small but growing is the mobile channel. The Index shows that mobile commerce grew from 0.4 per cent in Q1 of 2010 to 3.9 per cent in Q3 2011.

To read the full article on Computing, please click here: Analysis: What challenges do online retailers face in 2012?

Related Links:

• Press Release: Strong finish to 2011 for online sales
• Industry Overview: Retail