Online shopping is set to slow down significantly as the channel matures and competition increases, while retailers will have to work much harder to win and keep customers. At Verdict’s e-Retail 2010 and Beyond conference, which took place this morning, the retail analyst revealed that although online expenditure will increase by more than 56 per cent to £35 billion by 2014, and will continue to outperform total retail, growth will slow considerably from previous years.

Verdict forecasts average annual growth between 2009 and 2014 will be 12 per cent, compared with an average of 35 per cent per annum over the previous decade. Moreover the most valuable and prolific shopper group, the 35-44 year olds, currently spending £6.2 billion online, and accounting for a over a third of online retail expenditure in 2009, are the ones most likely to cut back on spending. The number of online shoppers is also heading for saturation - though Verdict predicts numbers will rise to 32.5 million in 2014 this will be only another four million shoppers, and their spend will be spread over far more websites as the number of retailers online continues to increase rapidly.

Malcolm Pinkerton, senior retail analyst, says: “With the number of people shopping online becoming highly saturated, retailers will have to change and evolve their online strategies. Driving loyalty and increasing spend per head across all age groups will become vital factors to ensure growth.”

Sarah Peters, senior retail analyst, comments: “The online shopper is extremely valuable. Retailers have had it relatively easy online over the past decade because of the channel’s rapid growth and lack of competition, but just as in overall retail, the next five years will be much more challenging. If they plan their strategy now and understand the change in the competitive dynamics they will be able to ensure they profit as a result.”

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