Online retail spending figures for the last month of 2010 indicate a record breaking 25% year-on-year increase
Online retail spending figures for the last month of 2010 indicate a record breaking 25% year-on-year increase
The latest figures from the IMRG Capgemini e-Retail Sales Index reveal that shoppers in the UK spent a total of £6.8 billion online during December.
Sales were up by 7% on November and by 25% on December 2009, with the Index value reaching a record high.
The results round off what has been an impressive year for online retail. A total of £58.8 billion was spent online in 2010, which resulted in the Index increasing by 18%, far outstripping its original prediction of 13%.
For 2011, IMRG and Capgemini have predicted the Index will see a further 18% growth, with total e-retail sales estimated to be worth £69 billion.
December finishes strongly
The December figures showed that, despite the dire predictions during the run up to the festive season, online retailers had a very successful Christmas, resulting in an above average year-on-year growth in nearly all sectors. The Index attributed this impressive growth to two major factors: the impending increase in VAT and of course the coldest recorded December in the UK for 100 years.
It seems that as the snow fell, shoppers across the country opted to buy online, instead of battling the elements to the High Street. This trend had a positive impact for all online traders, including those with a multichannel proposition; House of Fraser reported 120% growth in online sales compared to the same period the year before. Similarly, John Lewis and Marks & Spencer reported exceptionally strong results.
In terms of specific sectors, the harsh conditions had an inevitable impact in sales for clothing, footwear and accessories. As the country looked to wrap itself up in winter coats and chunky scarves, the sector saw a year-on-year increase of 40%: the strongest growth for this sector for 19 months. Clothing retailers also experienced a massive 50% leap in conversion rate, suggesting consumers are not just surfing the net to window shop, but researching the best price and placing an order.
Another noteworthy sector was alcohol, which, in keeping with the festive and party season, saw the largest growth, boasting a massive month-on-month leap of 32%. Unexpectedly, year-on-year growth for this sector saw a significant 36% increase from December 2009.
Chris Webster, head of retail consulting and technology at Capgemini, commented: “Online sales in December have grown again off the back of a very impressive November. This is down to two main reasons. Firstly, the spike in sales can be attributed to the season; not only is it traditionally the strongest month for retail but coupled with the heavy snow fall clearly led to many consumers staying at home to do their Christmas shopping. Secondly, the ongoing trend of consumers putting down the car keys and turning on their computers is only set to continue particularly as consumers use the power of the web to make their money go further as the economy recovery remains fragile.”
Growing confidence in e-retail
James Roper, chief executive at IMRG, added: “December saw an incredible jump in online sales as a result of the weather conditions and it’s reassuring to see that despite the coverage of delivery problems, consumer confidence was not affected. Growing confidence and reliance on e-retail during times of adversity, whether that’s harsh weather conditions or belt-tightening as a result of the economy, has been reflected in the impressive growth throughout 2010.”
Jonathon Brown, head of online selling at John Lewis, said: "We've had an outstanding Christmas and Clearance period in 2010, and there's no doubt johnlewis.com was a vital part of that success. Online sales for the five weeks to 1st January 2011 were 42% up on last year, and it was particularly pleasing to have achieved several trading records. We have also now passed the £500m mark for online sales for the year.
"The hard work our team put in over the year to develop the website really paid off, especially when snow affected trade at many of our branches. The increase in online sales, especially during the adverse weather in early December, demonstrated just how important the website has become to our customers."
