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September 2018: Online retail sales slump to lowest level this year

  • September index increased by just +7.5% year-on-year (YoY) in September
  • Represents the lowest September growth since 2014
  • Total market growth averages: 3-month (10.1%), 6-month (13.6%), 12-month (12.3%)
  • Clothing performed well below the 5-year average for September (+2.2% vs +7.4%)

LONDON UK – 18 October, 2018: UK online retail sales experienced its lowest September growth (+7.5% YoY) since 2014 last month, according to the latest IMRG Capgemini e-Retail Sales Index.

Online sales have faltered since England’s World Cup Exit in July and the close of the hot summer, and despite a brief uplift around the August bank holiday, growth fell to a new 2018 low in September. For the third-quarter overall, online retail sales growth was up +10.1%; by comparison, in the second-quarter it was +17.1%.

The sector which felt the brunt of the fall in spending was Clothing, which at just +2.2% YoY performed significantly below the 5-year average for September of +7.4%. Meanwhile Gifts decreased by -23.0% YoY, in its biggest drop since March 2010, suggesting that wallets have tightened after a high-spending Q2.

Meanwhile the index for sales via smartphones continued to grow during September – increasing +16.1% on last year – however growth has slowed considerably against the +55.8% recorded last year, with the market reaching a greater level of maturity. Sales via tablets continued to plummet, hitting -22.5% YoY compared to +8.1% last year.

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Bhavesh Unadkat, principal consultant in retail customer engagement, Capgemini: “This month’s performance was the lowest growth seen this year, however it was building on what was a strong performance in September last year (+13.0%). 

“Back to school and new season launches seem to have had less of a draw for consumers despite weather being favourable. The clothing sector saw a drop in online visitation in September, though conversion and basket value increased, suggesting that a smaller customer base is driving the sales and customers are shopping on a more needs basis rather than impulse buys. 

“Mobile commerce also dropped to a new low of +1.1% in September following significant decline in the last two months. Multichannel retailers hit a decline of -11.8% vs last year, compared to 8.8% in online only retailers.

Andy Mulcahy, strategy and insight director, IMRG: “Following such a strong start to the year for online retail sales, the third-quarter has come in notably lower at only +10.1%, and there are a few factors that may be influencing this.

“The strong second quarter, stimulated by events such as the Royal Wedding, World Cup, and heatwave, may have left people with less disposable income in quarter three. However, beyond that, shopper confidence appears to have fallen at a time when numerous retailers are putting out profit warnings and announcing store closures.

“Meanwhile, several retailers have spoken publicly about the scale of discounting that has been active across various retail sites, meaning that the industry is already heavily involved in discounting before we even get near to Black Friday. The conversion rate was markedly down in September; could it possibly be that people are already browsing for ideas, in the knowledge that Black Friday will inevitably bring heavier discounts?”

-ENDS-

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

A global leader in consulting, technology services and digital transformation, Capgemini is at the forefront of innovation to address the entire breadth of clients’ opportunities in the evolving world of cloud, digital and platforms. Building on its strong 50-year heritage and deep industry-specific expertise, Capgemini enables organizations to realize their business ambitions through an array of services from strategy to operations. Capgemini is driven by the conviction that the business value of technology comes from and through people. It is a multicultural company of 200,000 team members in over 40 countries. The Group reported 2017 global revenues of EUR 12.8 billion.

Learn more about us at www.capgemini.com.

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