July online spending enjoys highest growth for three years, in line with national retail figures rise
July online spending enjoys highest growth for three years, in line with national retail figures rise
The latest results from the IMRG Capgemini e-Retail Sales Index reveal that shoppers spent £5 billion online in July, the most in any month this year.
It also demonstrated how online benefited proportionally from UK sales volumes, including petrol and diesel, which ONS Retail Statistics said rose 1.1% overall last month.
Online, the Index grew by 18% compared to last July, in the biggest annual jump for the month of July since before the recession in 2007. As retailer promotions drew shoppers online, an impressive growth rate of 14% was recorded compared to June – the highest monthly growth of 2010 so far.
The great getaway commences
Growth in travel sales rose by a third as a result, with Brits escaping the drizzle in favour of last minute deals in hotter climes. The travel sector grew by a greater amount compared to June than any other sector analysed in the Index, as consumers took advantage of heavy discounting by travel companies to book last minute holidays.
Alcohol sales took a knock after the highs of the start of the international sports season in May and June, and perhaps after England’s disappointing performance in the World Cup. Sales of beers, wines and spirits online fell by a tenth compared to the previous month.
Chris Webster, Capgemini vice president, head of retail consulting and technology, commented: “Although online retail sales survived the recession more convincingly than High Street sales, the last two years or so have no doubt been shaky at times.
“It is really encouraging to see growth levels returning to those seen pre-2007 and before consumer confidence was knocked by the financial crisis and recession. The stand-out result this month came from the travel sector, which was boosted by shoppers taking advantage of last minute deals to escape the disappointing summer.”
David Smith, IMRG managing director, said: “With over half of the UK population online at least once a day, it is no surprise that online sales continue to grow impressively year on year. The evidence mounts that High Street retailers will need to invest more in their online business and put it at the heart of their retail strategy. Online retailers, on the other hand, will need to continue to innovate as they strive to close the growth gap.”
Multichannel wins browsing battle
The performance of retailers with a High Street and an online presence – so-called ‘multichannel’ retailers – continues to outshine that of online only, or ‘pureplay,’ retailers. Multichannel retailers witnessed growth of 18% compared to last month, pureplay retailers showed month-on-month growth of only 8%. Multichannel retailers are also managing to convert more browsers into actual sales, with an average conversion rate of 4.49%, compared 4.35% for online only retailers.
David Stratton, head of partnerships at HolidayExtras.com, said: "July was a month of positive growth, with parking bookings up by 7%; hotels up by 4% and overall growth of five 5%. These figures, while in line with our forecast, are behind our yearly budgeted expectations due to the volcano activity in April. We are delighted to be in a positive growth situation, particularly in the current economic climate. This is due to the savings that we offer our budget-conscious holiday travellers and our focus on customer support. August to date has seen record booking days."
Christian Robinson, managing director at Firebox.com, said: “Firebox achieved record turnover again for July with order volumes up 52% year-on-year. Hit products included Silly Bandz – the smash hit silicone shapes that can be worn as funky bracelets or used as rubber bands – which sold in their thousands. Demand was so high, we actually struggled to keep them in stock during the month and they remained our number one seller (by volume) throughout the month. It’s exciting to see such a significant jump in sales during the summer, before the super busy Christmas period begins.”
