Online retail sales boom in April as consumer migration to ecommerce accelerates

Ecommerce Online Retail

Online retail sales leapt +18.8% during April showing the strongest month-on-month growth since November 2016.

According to the IMRG Capgemini e-Retail Sales Index, the first stint of really warm weather had a positive impact on sales after a wet and cold Easter in March proved a washout for retailers.

In Clothing sales increased +15.6% year-on-year (YoY), and the Garden sector also grew by +12.0%. Comparatively, a weaker month for Home (decreased by -15.6% YoY) brought the overall Home and Garden sector increase to 4.6% versus last year.

IMRG strategy and insight director Andy Mulcahy said that in addition to the boost from the warmer weather, there were signs of a return to a more confident mood among shoppers.

“Growth in online retail sales revenue has been markedly higher than expected throughout 2018 so far. One reason is likely to be related to a turnaround in economic fortunes – while inflation outstripped wage growth for most of 2017, the gap has closed in recent months and wage growth was actually higher than inflation in March 2018,” explained Mulcahy.

“This means that, on the whole, UK shoppers should be feeling a bit more confident in making purchases. This is reflected in the data we are tracking – if we look at the last six months (Jul-Dec) of 2017, online retail sales growth was +12.2%. The first four months of 2018 has come in at +16.2%,” he said.

Mulcahy also pointed out that online retail has benefited from a slump in high street shopping, where a number of retailers are struggling as a result including New Look, Select, House of Fraser and Mothercare, who are all at various stages of implementing Company Voluntary Arrangements (CVA) to enable them to restructure financially and in some cases to close stores.

“What has been very apparent is that it is online retail that is benefiting, while the high street is facing a sustained downturn. Up until now, there have been multiple reasons to suspect that this split in performance may have been influenced by various external – and therefore temporary – factors; the above-average rainfall in January, the snow in February / March, Easter being early this year. The fact that April 2018 is comparing against an April last year that included Easter – with the boost to retail that it typically brings – suggests that this is not a blip.

“As shoppers have started to find themselves with a bit more disposable income in 2018, we are possibly witnessing an acceleration in the shift of shopper behaviour over to online. Much of the coverage of the downturn on the high street sees it as a negative development – but actually shoppers are still shopping as much as they did before, it’s not retail that is suffering; it’s just undergoing a digital transition at a far faster pace than was previously the case,” Mulcahy said.