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Online retail sees highest growth this year

Online retail sees highest growth this year
Friday January 11 2013

The latest figures from the IMRG Capgemini e-Retail Sales Index show that summer sunshine and Olympic fever loosened purse strings with online sales experiencing its highest growth this year, recording a huge 17% jump on July 2011 and a 9% increase on June 2012.

This equated to an estimated £6.5bn spent online (an average of £128  per person), a significant rise on the £5.8bn spent during July 2011. Total growth for the year to date stands at approximately 13% - in line with previous forecasts.

Clothing sales, helped by brief sunny spells and ongoing price cuts, made a welcomed return to double figure growth in July,  leaping 18% on June 2012 and up 15% on July last year.  New autumn lines hitting the shelves also contributed to the clothing spike encouraging shoppers to update their wardrobes earlier than usual.

Travel was up 12% year on year, recovering from a relatively sluggish performance in July 2011 when the sector was down 1% year on year. At £1,050, the average basket value (amount spent in a single purchase) broke the £1,000 barrier for the second time this year – a year-on-year increase of 24%. This growth suggests that despite economic uncertainty, Brits are prepared to spend to compensate for the disappointing summer weather seen in early July.

Electricals performed particularly well in July, increasing 30% on the same time last year, boosted by the wet weather and the need for indoor entertainment. The sector was also helped by Brits jumping online to buy high definition televisions and other electrical devices to guarantee the best seat in the house to watch team GB’s performance in the Olympics.

m-Retail sales continued to grow at a huge rate in July, recording a 313% increase on the same time last year. Whilst this is still very strong growth, it falls short of the year-on-year growth experienced in May and June 2012 (up 360% and 356%, respectively).

Online-only and catalogue retailers reported a year-on-year growth of 19.5% in July, surpassing their multichannel counterparts (15%) for the seventh consecutive month. Online only retailers also fared better in terms of average basket-spend, reporting a growth of 23% - £101 spent on average in July 2012 compared with £82 in July 2011. Conversely, average basket-spend for multichannel retailers was down 1% at £198 compared with £200 in July 2011.

Chris Webster, head of retail consulting and technology at Capgemini says: “The return to such high growth will be welcomed by online retailers. While we won’t know the direct impact the Olympics has had on the sector until next month, the excitement and build up to the Games certainly contributed to July’s strong performance. Retailers, both online and offline, were offered a unique opportunity to build an international base of customers, so it will be interesting to see whether the UK successfully capitalised on the millions of additional visitors to Britain.”

Tina Spooner, Chief Information Officer at IMRG, comments: “July saw the strongest Index performance year-to-date in terms of annual growth, with sales peaking during the second week of the month when many retailers launched their summer sales. The London Olympics also appears to have had a positive effect for online retailers, including the travel sector, where the average spend was 24% higher than July last year.  It seems not all Britons enjoyed the blanket coverage of the Olympics, with many instead choosing to holiday abroad.

“The rapid growth in m-retail sales is clearly being driven by a change in consumers’ shopping behaviour and how and when they engage with brands. Retailers that focus on optimising their websites for this new breed of shopper will, no doubt reap the benefits of their investment.”


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