Online retail sales rebounded in October, but the growth rate is still the lowest ever for that month, according to the latest eRetail Sales Index from IMRG and Capgemini.
With the peak shopping season almost upon us, and winter temperatures finally setting in, retailers were given a much needed boost in October, with online sales growing by +6.2% year-on-year, but it was still the lowest growth for online sales in October ever.
Though still behind the 5-year average of +10%, October’s results beat the 3-month, 6-month, and 12-month rolling averages, respectively at +5.0%, +4.5% and +5.1%.
However, growth for the overall year is currently tracking at less than half that of the previous 12 months at +5% versus +12%.
Online only retailers did perform three times better than multichannel retailers at +12.4%, versus +4.3%, and sales through smartphones continued a recent spate of growth – up +50.8% versus last year.
October’s slightly more positive overall performance was mirrored in a number of categories, including clothing at +5.2% – springing back from the first negative growth in over two years in September, to record a moderate rise.
Andy Mulcahy, strategy and insight director at IMRG, said: “On the surface of it, online retail sales performance in October showed signs of improvement compared with how it has been doing in recent months. However, there are several signs in the data that the growth was in response to heavy discounting, with the overall average basket value down -21%. For clothing it was down -13%.
“Retailers will be hoping that Black Friday falling later in the month, after payday, will help sustain shopper demand – but it seems far from certain.”
Bhavesh Unadkat, principal consultant in retail customer engagement at Capgemini, commented: “October results provided a little relief for online growth figures, climbing back above average for the year so far, but it was also the lowest October growth on record, and a third lower than last year.
“Online only retailers did fare better, but they also saw a higher differential in basket value suggesting greater discounting could be driving this as we start the slippery slope in the run up to the festive period, where online remains the go-to for deal seekers.”
Unadkat says that discounting campaigns remain a familiar call to action when retailers are running behind targets to kick start sales activity. “We have also seen that reliance on discounting earlier and earlier in the season dilutes the effect of the flash sale events, such as the adopted, then anticipated, now extended Black Friday Sales.”
The question is, will this year be a washout as retailers struggle to capture shopper attention amongst a build-up of tactical discounting, or will shoppers release their purse strings as they look to get the most value for their money in an uncertain climate? Only time will tell.