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October online retail sales dip as traffic increases but customer conversion drops

Tom Bottomley
08 November 2022

UK online retail sales were down -3.4% year-on-year in October, compared to already negative growth in October 2021 of -7.3% and, while traffic to online sites increased by 2.1%, visitors converting into customers was -20% lower than October 2021.

October represented the nineteenth consecutive month of negative year-on-year growth in online retail, according to the latest data from the IMRG Capgemini Online Retail Index, which tracks online sales for 200 retailers.

However, month-on-month October online sales were up 11.7% compared to September, in line with previous years in the lead up to the holiday season, with increased consumer spend the norm as people begin to prepare early for Christmas.

While clothing has seen positive sales for most of the year, year-on-year it experienced flat growth last month, and health and beauty online retail sales declined by -7.2% compared to October last year.

Andy Mulcahy, Strategy and Insight Director at IMRG, said: “The gifts category gives us an indication of the challenging trading environment at the moment. It is experiencing declines of –20% and more in some weeks, and this comes on top of declines of -30% for the same weeks in 2021. Shoppers may really tighten their spend in areas such as gifts, which isn’t great news for Christmas demand.

“Furthermore, the timing of the chancellor’s autumn statement, currently scheduled for the Thursday before the start of Black Friday ‘week’, and where many expect the announcement of tax rises, it seems likely that shopper confidence will be dented further at the worst possible time for retailers.”

Simon Binge, Commerce Senior Manager of Customer Transformation at Capgemini, added: “Even in categories that are bucking the trend for October, like furniture, we can see clear evidence that the macro-economic environment is having an impact on consumer behaviour. Whilst furniture was up +2.9% year-on-year, we can see that this growth is being driven by budget (+7.8% year-on-year) and mid-market (+9.8%) retail categories, whereas the premium category is down a rather scary -42.8% year-on-year.

“The trend of trading-down can also be seen across home and garden, gifts and clothing, where the budget and mid-market categories are outperforming their premium counterparts.”

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