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Wednesday 13 November 2019

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Easter fails to provide online sales boost

Written by Peter Walker
21/05/19

After a disappointing first quarter, Easter failed to deliver a boost to online retail sales, with April recording sales growth of just 5.2 per cent year-on-year, according to the latest IMRG Capgemini eRetail Sales Index.

This compares poorly to a very strong performance in April of last year (up 12.5 per cent) but continues an ongoing trend of subdued growth seen since the start of 2019. During the first quarter of this year, the index recorded average sales growth of 7.5 per cent, which is the lowest quarterly growth since the first quarter of 2015 (up six per cent). Comparatively, the same quarter last year delivered growth of 14.5 per cent.

Further sector analysis shows a number of categories struggling significantly in April – most notably clothing, which saw its overall growth rate slow to 6.7 per cent year-on-year from 9.9 per cent in April 2018. This was the sixth consecutive month of single-digit growth for clothing, and follows a quarter of just 3.2 per cent growth versus 13.9 per cent in the same period last year.

Elsewhere in April, electricals continued a downwards trend, with growth falling to by 27 per cent, and gifts saw a similarly steep decline of 22 per cent. Following a 15-month run of very healthy growth, health and beauty also slumped to 0.7 per cent growth.

IMRG and Capgemini stated that in terms of channel spend, it has been an interesting year to date for mobile commerce, with a slowdown in growth over the last four years at the sector matures. However sales picked up in the past two quarters, average growth of per cent 12.4 per cent in the first quarter this year, versus last quarter (for smartphones and tablets combined).

In a complete reversal of fortunes, device sales for April dropped by 20.5 per cent, with the decrease more marked for online-only retailers (down 39 per cent) than multichannel (down eight per cent).

Andy Mulcahy, strategy and insight director at IMRG, said: “Online sales were strong in the first half of the year, but growth rates dropped toward the end of the year culminating in subdued trading over the Black Friday and Christmas peak.

“There seems to be little sign of imminent improvement in shopper confidence; retailers will now be hoping that the warmer weather forecast over the coming weeks may stimulate greater demand, especially for those selling seasonal fashion lines.”

Bhavesh Unadkat, principal consultant in retail customer engagement for Capgemini, said: “Easter 2018 fell between March and April, so we were hopeful the figures for April 2019 would be favourable given the slow performance in March – this did not seem to be the case given the 5.2 per cent increase year-on-year.

“If you compare March and April 2018 to March and April 2019 then the growth is only 6.2 per cent, which is still less than half the growth of April 2018 on April 2017,” he added.


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