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Impact of Amazon Prime Day evident in July online retail sales

  • Online retail sales up +11% in July
  • Overall conversion rate up significantly; suggests discount activity drove sales
  • Average spend on smartphones and tablets also up

UK online retail sales were up +11% year-on-year (YoY) in July, according to the latest figures from the IMRG Capgemini e-Retail Sales Index. This was the lowest July growth rate for the Index in four years (since July 2013), although it was building on a high growth rate recorded in July last year (when it was +18.6%). Growth for online sales so far in 2017 (Jan-Jul) is +12%.

There was a notable increase in the percentage of site visitors completing a purchase on online retailer sites in July, with the overall conversion rate reaching 5.8%, 21% higher than a year ago. The clothing and home and garden sectors in particular saw jumps in conversion rates, which were up 43% and 83% respectively. The fact that the conversion rate rise wasn’t matched by a similar boost in online sales revenue growth suggests that discounting activity was high in July, with the summer sales period in full flow and retailers under pressure from Amazon Prime Day.

At the same time, the average basket value (ABV) on mobile devices was also markedly higher in July – with the ABV on smartphones up 21% while for tablets it was up 17%. It may be that the multi-context nature of mobile devices means they are well suited to the kind of impulse shopping that is stimulated by major discounting periods such as when retailers launch their summer sales.

Looking at specific sectors, sales growth for the electricals sector was down (-5%) in July, following an even sharper drop in June (-13.9%), which may be related to shopper awareness around Amazon Prime Day and the promise of getting a deal on electrical products during that event. The home & garden sector, meanwhile, was up +25% – a strong performance that was probably boosted by the hot weather in July.

Justin Opie, managing director, IMRG: “87% of respondents to a recent retailer survey we ran claimed that the event has not led them to adapt their summer sales strategies – it does after all already fall during one of retail’s major discounting periods. Yet overall market growth of +11% for July, while solid enough, is probably a bit below expectation – while Amazon reported growth of +60% year-on-year for their 30-hour Prime Day period. Conversion rates being up sounds positive, but the fact that it didn’t deliver a similar boost to sales revenue growth suggests discounting was probably a factor in driving more visitors to complete a purchase. Prime Day is an established event in the calendar now and it may be exerting an impact judging by this month’s results, although other factors – such as rising inflation and consumer confidence – may also be at play.”

Bhavesh Unadkat, principal consultant in retail customer engagement design, Capgemini: “We’re seeing the slowdown in purchasing continue across July as this trend of low consumer confidence lingers. With the pound almost running level with the euro luxury purchases and ‘nice-to-haves’ are hit hardest. While conversion rates are up broadly speaking, this is only with repeat buys or necessities. Even with enticing luxury offers made available to try and compete with Prime Day, more browsing choice lead to a further dip in conversion for these categories with consumers browsing more but buying proportionately less.”

 

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About the ‘IMRG Capgemini e-Retail Sales Index’

The IMRG Capgemini Index, which was started in April 2000, tracks 'online sales', which we define as 'transactions completed fully, including payment, via interactive channels' from any location, including in-store. 

About IMRG

For over 20 years, IMRG (Interactive Media in Retail Group) has been the voice of e-retail in the UK. We are a membership community comprising businesses of all sizes – multichannel and pureplay, SME and multinational, and solution providers to industry.

We support our members through a range of activities – including market tracking and insight, benchmarking and best practice sharing. Our indexes provide in-depth intelligence on online sales, mobile sales, delivery trends and over 40 additional KPIs.

Our goal is to ensure our members have the information and resources they need to succeed in rapidly-evolving markets – both domestically and internationally.

www.imrg.org 

About Capgemini

With more than 190,000 people, Capgemini is present in over 40 countries and celebrates its 50th Anniversary year in 2017. A global leader in consulting, technology and outsourcing services, the Group reported 2016 global revenues of EUR 12.5 billion. Together with its clients, Capgemini creates and delivers business, technology and digital solutions that fit their needs, enabling them to achieve innovation and competitiveness. A deeply multicultural organization, Capgemini has developed its own way of working, the Collaborative Business ExperienceTM, and draws on Rightshore®, its worldwide delivery model.

Learn more about us at www.capgemini.com.

Rightshore® is a trademark belonging to Capgemini