UK online sales were up 14% in September but, while this was the third-strongest growth rate so far in 2017, there were signs of macroeconomic pressures influencing shopper behaviour, say IMRG and Capgemini who have released their latest e-Retail Sales Index today.
There was good news for clothing, which achieved its highest September year-on-year growth in four years with a growth of 15.9%. IMRG Capgemini suggested this performance could have been a result of prices in clothing rising less sharply than in September last year (according to data from the ONS), which may have helped boost shopper confidence in that sector.
However the electricals sector suffered its first negative year-on-year growth (-5.6%) for the month of September since IMRG started tracking it in 2003, which may have been down to price inflation being more noticeable to consumers in this sector given the relatively high prices of the products.
The gift sector achieved growth of just 1.9% compared with +33% in September 2016, which again may be reflective of shoppers feeling the pressure of inflation and avoiding making unnecessary purchases.
“While 14% seems high, it hides the impact of inflation. When you look at how much faster online is growing than multichannel it implies that people are currently more price sensitive, comparing deals rather than buying directly through retail,” explained Capgemini principal consultant in retail customer engagement design Bhavesh Unadkat.
“Couple this with September’s cross sector spending habits, and it indicates a strong focus on essential purchases, with gifts slowing significantly and electricals continuing to decline. It could in fact be argued that electricals now serve as an indicator of consumer confidence, especially when you pit the sector’s performance against the previous year’s across the last six months,” he added.
IMRG managing director Julian Opie said there were notable differences in the performances of online-only retailers and multichannel retailers. “While the online-only retailers are enjoying far higher conversion and sales growth currently, the average spend on multichannel retail sites is much higher. It’s possible that the online-only retailers are benefiting from the lingering perception that the best deals are available online, so as pressure on their available spend increases, shoppers look to the ‘pure’ online brands over the high street alternatives,” he said.
“Conversion on multichannel retail sites may also be supressed by use of store locators and a higher potential for abandoning a basket online, where they were carrying out research, only to complete the purchase in a conveniently-located store,” Opie added.