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Sunday 08 December 2019

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Warm weather brings six month online sales high

Written by Peter Walker
20/03/19

February’s unexpectedly warm weather inspired a revival in online retail sales last month, as the industry recorded its strongest growth - up 9.4 per cent year-on-year - in six months, according to the IMRG Capgemini eRetail Sales Index.

Despite falling below the five-year average of 10.6 per cent year-on-year for February, the growth provided some relief for online retailers after recent struggles.

The impact of the warm weather - which included the hottest February day on record - was particularly reflected by the garden sector, which experienced growth up by a third compared to last year. Health and beauty also built on its recent strong performance with a 13.4 per cent year-on-year increase for the month.

In contrast, gifts (down 27.6 per cent) and electricals (down 15.4 per cent) both fared poorly during the month, and clothing spend remained relatively flat (up 0.9 per cent) – perhaps due to it being too early for spring lines.

Andy Mulcahy, strategy and insight director at IMRG, explained that discounting had been very widespread across retail since July 2018, owing to the difficult and unique trading environment that retailers are facing.

“Following January clearance, many either switched off discounting or at least reduced the prominence of it – and it’s the multichannel retailers that seem to have navigated the shift more successfully.

“Those with a High Street presence recorded a rate of online sales growth almost three-times greater than their online-only counterparts and the basket values are also revealing; the February average spend on multichannel sites was down seven per cent, while for online-only retailers it fell more sharply by 17 per cent, suggesting perhaps that they still maintained a greater reliance on discounting,” he added.

Bhavesh Unadkat, principal consultant in retail customer engagement at Capgemini, said it was interesting to see that conversion was up over 20 per cent on the year, but sales only grew by nine per cent.

“This performance is driven by ongoing uncertainty ahead around Brexit outcomes and looming interest rate rises, feeding customer caution,” he continued, noting: “The result is that people keep shopping for basics, essentials and discounts in the mainstream, but stop shopping for ‘inspiration’ or at higher price points, both of which lead to a decrease in conversion.”


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