- In January 2023, ecommerce sales were down -2.2% Year-on-Year (YoY), that is against a massive decline of -22.5% in January 2022
- Month-on-Month (MoM), January declined -28.7% relative to December. This MoM decline is sharper than typical for this time of year
- Traffic to online retail sites was down -5.2% YoY, against -7.7% in January 2022
- Converting customers proves to be difficult for retailers as the rate has stayed low and flat
Tuesday 7th February 2023 – Difficult trading conditions continued into the new year for ecommerce, where total market online retail revenue growth experienced a -2.2% YoY decline, presenting negative-on-negative growth against the huge, lockdown-affected rate of -22.5% in January 2022. That’s according to the latest IMRG Online Retail Index, which tracks online sales for 200 retailers. It also saw a sharper-than-usual month-on-month (MoM) decline, where revenue dropped by -28.7% against December (between 2019-21, it was in the range of -17% to -21%).
Growth in traffic to online retail sites was often positive during 2022, albeit marginally, but that too has declined for a few months running now, down -5.2% YoY in January against -7.7% in January 2022 for the overall market, though some categories are faring better than others.
Inflation is also evident in the figures, with the total market average basket value increasing from £113 in January 2022 to £130 in January this year. Meanwhile, retailers are struggling to get their customers to convert at the same rate as before the cost-of-living crisis started to bite; while the average conversion rate for total sessions remained roughly flat against January 2022 (around 3.2%), it is substantially down against two years ago in January 2021 when it was 4.1%.
Looking at online retail product categories, gifts sales continue to be tough with a -16.1% YoY decline in January 2023 against -14.2% in 2022. Many retailers who sell clothing might also have reduced confidence for 2023 as the online category experienced a -4.5% YoY decline in revenue against a modest +0.9% for the same month in 2022. Footwear was the single positive-territory growth subcategory of clothing in IMRG’s index, at +4.7%. Another stand out performer this month was the subcategory of home & garden, gardening, that saw a significant online growth increase of +43.8% from -50.5% in January 2022.
Andy Mulcahy, strategy and insight director, IMRG: “These disappointing, though not entirely unexpected, revenue and conversion rate results are in line with IMRG’s 2023 forecast for online retail, which expects YoY declines in total market revenue growth (-3%), home & garden and electricals categories (both -5%), health & beauty (-4%), gifts (-7%), and no growth is predicted for clothing. Shopper confidence is the key however, if there are any notable improvements in the economic situation we should see that conversion rate nudge up again as people feel a bit more secure in their financial situation, so can spend out on more discretionary purchases. From January’s results however, it feels little way off yet.”
About the ‘IMRG Online Retail Index’
The IMRG Online Retail 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.
For over 20 years, IMRG (Interactive Media in Retail Group) has been the voice of online 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 indices provide in-depth intelligence on online sales, mobile sales, delivery trends and over 80 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.