Heading into the all-important Christmas trading period, the online retail sector was given a much-needed boost in October, with sales growing by 6.2% year-on-year, according to the latest IMRG Capgemini Online Retail Index. However, whilst an improvement on the 3-month, 6-month, and 12-month rolling averages (respectively +5.0%, +4.5%, +5.1%), the figure still marked the lowest growth for online sales in October ever.
Breaking down the results, October’s slightly more positive overall performance was mirrored in a number of categories, including clothing (+5.2%), beer, wine and spirits (+4.8%) and home (+13.6%). Clothing sales, in particular, sprang back from their first negative growth in over two years in September, to record the modest rise. There was also a small glimmer of hope for electrical retailers, who saw their steady plummet in sales slow to -10.5% vs. -15.4% in September.
From a channel perspective, online only retailers had a far stronger month than their multichannel counterparts, with sales growth of 12.4% in comparison to just 4.3%. Meanwhile, a rise in m-commerce (+15.2%) highlighted a similar divide in growth between smartphones (+50.8%) and tablets (-8.6%).
Andy Mulcahy, strategy and insight director at IMRG, commented: “On the surface of it, online retail sales performance in October showed signs of improvement compared with how it has been doing in recent months. However, there are several signs in the data that the growth was in response to heavy discounting – the overall average basket value was down -21%, for clothing it was down -13%, while for electricals it was also down -21% and the revenue growth for that category was still negative.
“The question now is whether this stronger growth is indicative of an improvement in shopper demand, or whether November sales will struggle as a result of volume being pulled forward. This happened in June this year, where sales growth was up 8.5%, the highest of the year, but this was as a result of discounting to stimulate that activity and July growth was the lowest ever for that month as a consequence. Retailers will be hoping that Black Friday falling later in the month, after payday, will help sustain shopper demand – but it seems far from certain.”
