Anita Sonnet has a simple rule for internet shopping. A 36-year-old mother of two living in Southampton, she says: “I try not to buy anything unless I get something back.” That might be free delivery, a special offer or even cash. Portal sites such as Line My Pocket or My Shopping Rewards give you a small amount of money for visiting shopping sites through them. “I spend a lot of time on the computer, so it has to be worth my while,” she reasons. “For me, that’s the point of internet shopping. Loyalty doesn’t come into it. I’m trying to save enough with my cashback to do all my Christmas shopping free.”

Sonnet is one of the internet’s growing legion of savvy shoppers. There has been a shift in the balance of power between online shops and shoppers, and in the opinion of Chris Russell of eDigital Research, it is all in the consumer’s favour. Increasingly likely to use broadband, the online shopper is sophisticated, confident and impatient. Good customer service is essential to almost a third of these consumers, as is good usability, Jupiter Research reports. Yet shoppers are fickle — only 17% remain loyal to an online shop they have used before — and fussy. One-hour delivery by online retailers such as Ocado has raised the bar for everyone, while Google has lifted search-engine expectations sky high.

Online shopping is booming. Verdict Research reports that over the past year, the internet was not only the fastest- growing retail sector, but the key driver behind retail growth. “Although online’s share of retail is small — just 3.1% — its meteoric growth is sending shock waves through the wider retail sector,” says Nick Gladding, senior analyst at Verdict. “But its real significance is that it is altering consumer behaviour.”

Shoppers don’t only shop. They now make “informed purchase decisions” through “multichannel” outlets, often adopting a process called “disintermediation”. An ugly word for a simple idea, it means cutting out the middleman.

There are different ways to apply this principle. One model works like EasyJet or Ryanair, flying past travel agents for the sake of rock-bottom prices. Another is to imitate what Sony has done with Sony Style online. Real-world Sony Centres are not owned by Sony, but the manufacturer itself operates Sony Style. Patrick Butler, general manager of direct sales in the UK, says that the web gives access to “the people who want to deal with us directly”.

The site sells a complete range of often hard-to-find accessories, with a telephone line so people can glean every last bit of information. “If they have a half-hour chat, then go and buy the product more cheaply elsewhere, we don’t really mind, because it is still supporting our product,” Butler says. The site enables people to pre-order new products, a clever option in the fast-moving world of consumer electronics. It also tries to add value by offering a rental service to DVD buyers, or online printing to those who choose a camera.

Online shops, in other words, are also growing savvier. The UK is the king of consumer electronics online, with more purchasers than anywhere else in Europe. With its simple filtering search facility, the online-only retailer Dabs has understood this, as has the clearly laid-out Essential iPod. Broadband connections, with speeds up to 40 times faster than dial-up, have also transformed the look of websites. More than half of internet surfers research purchases over the web, and sites such as Modus Fireplace Designs and fashion favourites Diesel, Marc Jacobs and Alexander McQueen are wonderful examples of how impressively the net can showcase goods.

In the online evolutionary swamp, the strongest have already pushed weaker sites into administration. “Argos’s victory over Index in the battle of the catalogue showrooms was in part due to its superior multichannel capabilities,” Gladding says. “MVC, a more traditional music and video store that didn’t do much online, failed because of intense price competition that was in part driven by online retailers, while the computer retailer Tiny was unable to compete with prices driven lower by the likes of Dell.”

Meanwhile, the strongest grow stronger. Jupiter says that in the first six months of 2005, Tesco’s online sales grew by 31%, but its online retail profit grew even more, by 37%. “Tesco has integrated its online and offline opera-tion beautifully,” says Mark Mulligan, Jupiter’s research director for Europe. “Because it fulfils orders from local stores, the more local stores it has, the easier it becomes to guarantee delivery times, with the goods travelling a shorter distance and products arriving fresh. Stores can get a better sense of stock levels in local supermarkets because staff check shelves in between regular stock sweeps.”

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Driven by Tesco’s success, Britain is a global leader in online grocery: 10% of UK online shoppers buy groceries on the web, and in 2005, Tesco’s site sold more than the entire US online grocery market. “It has created a market in the UK that is different from anywhere else in the world, and people are looking to the UK to see what they can learn,” Mulligan says.

Nevertheless, consumers are in the driving seat. Following shoppers’ complaints, the Office of Fair Trading has told online supermarkets to be clearer about “guide pricing” (offering one price online and another on delivery).

Compared with other shoppers, people who buy online tend to be more affluent and to have been online for longer; they are also more likely to have broadband. Their first priority is value for money. “Retailers must accept they are being actively assessed against the competition,” Mulligan says. The second key trigger influencing purchasing decisions is customer service. In the UK, 31% of shoppers emphasise its importance. Along with Sweden, we value service more than anywhere else in Europe.

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