UK shoppers spent more online in 2011
The amount UK shoppers spend online rose in 2011, according to figures out this week.
According to the latest IMRG Capgemini eRetail Sales Index, British online shoppers spent £68bn in 2011, 16% more than the year before. But analysis by Kelkoo and the Centre for Retail Research found UK online sales were up by 14% to £50bn.
The IMRG study predicts that growth in internet retailing sales will slow to 13% in 2012, and it expects some £77bn to be spent online during the course of the year.
According to the IMRG index, e-retail now accounts for 17% of the total UK retail market and is likely to increase with the rise of mobile commerce and following high sales of tablet computers in the last year. Its figures also showed December sales were strong, rising by 16.5% during the month to a record £7.9bn. But the growth came despite a slowdown in spending on clothes. Sales in this category grew by just 12% in the month, compared to growth of 40.5% in December 2010. Faster growth came in the health and beauty category, (up by 63%, compared to the previous December), in home and garden (up 45% on last year) and in accessories (up 46%). Travel continued to show slower growth, coming in at 4% improvement in December on the previous year, but down by 11% on the previous month.
Chris Webster, head of retail consulting and technology at Capgemini, said: “Strong online sales over Christmas were even more impressive since they built on a 25% year-on-year growth from 2009 to 2010. During 2011 we saw continued pressure on sales as shoppers became savvier in looking for bargains and this continued in the run up to Christmas.
“The rapid rise of mobile in 2011 will continue into 2012 as consumers became familiar with shopping via tablet devices and smartphonest, some taking advantage of their recent Christmas presents. This changing landscape will open up a myriad of opportunity for retailers including the integration of stores into the multi-channel world and the potential of new capabilities like location based markerting services.”
James Roper, chief executive of IMRG, said: “The December results are incredibly impressive as the growth for the same period in 2010 was 25%, meaning it had to climb from a very high base. Despite the fact that consumers are finding themselves with less and less disposable income, the e-retail market keeps defying the general retail trend to record double-digit growth.
“Online is such an integral part of the shopping experience now that it generally plays at least some part in most purchases, whether through research and comparison or social media and product reviews. We are forecasting growth of 13% moving into 2012, lower than our estimate for 2011 but it would still be an extremely positive performance given the economic climate and the fact that the online market has reached a degree of maturity now, meaning it can offer a really key contribution to help drive the economic recovery.”
Multichannel retailers’ sales, said the IMRG index, continued to grow faster than those selling through online and catalogues only, rising by 14% in the second half of 2011 compared to the same period in the previous year. Sales by online-only traders grew by 13%. However multichannel growth fell back from growth of 25% in the first half of the year.
Gwynn Milligan, managing director of private sales site Cocosa, said: “Cocosa has had a record breaking Christmas, with our online sales up 125% year. We broke daily and weekly sales records. We have cleared all of our stock that went into sale.”
Meanwhile, shopping comparison site Kelkoo said internet shopping accounted for 12% of total UK retail spending in 2011, and that the figure, the highest in Europe, could reach 13.2% by the end of 2012.It predicts that UK online sales will grow by 14% this year to £57.39bn, in comparison to growth of 3.6% across all UK retail sales.
Its analysis, compiled by the Centre for Retail Research, suggested that in 2011, online sales in the UK, France and Germany accounted for 71% of all ecommerce sales in Europe. But, predicted the Kelkoo study, sales in the UK and Germany will show some of the slowest growth in 2012, at 14% and 13% respectively, while fast growth is expected in Poland (24%), France (22%), Sweden and Italy (18%).
Chris Simpson, chief marketing officer at Kelkoo, said: “Over the last five years internet retailing has improved substantially thanks to the use of affordable ‘always-on’ internet connections, simple and secure payment systems and the increasing popularity of mobile devices combined with the growth of mobile-based retail sites. All of these factors should help online retail sales and retail sales via mobile devices to continue to thrive in 2012.
“It’s natural to see consumer appetite for online shopping growing year on year. This is not because people are spending more money but because they are shopping in the most convenient and affordable way for their individual needs. Inevitably, this will have an ongoing negative impact on the high street, an issue which is forcing retailers to bring the two channels much closer together. It is widely acknowledged that the recession has boosted the appeal of online retailing and UK consumers are more determined than ever to make every penny count. We predict that British online retailers will enjoy an average rise in online sales of 14% this year.”
And today, figures from the Office for National Statistics estimated that £837.1m was spent online in the UK each week in December, giving internet sales a 10.9% share of the £42.1bn spent in the UK retail sector in December – or £4.59bn. Sales volumes were up up, said the ONS, by 2.6% compared to December 2010 and by 0.6% compared to November 2011. They rose in value by 6.2% on the previous year and 2.6% on the previous month.
At the same time, the ONS Retail Sales Figures for December 2011 showed that 8.4% of all retail spending in the UK took place in December, with 7.2% taking place in November. January was the slowest month, with a 5.9% share. But the proportion of sales taking place online fell back in December 2011 to 10.9%, from 11.5% in November.
But which was the busiest day of the year online? According to BT Expedite and Fresca, BT’s specialist retail division, that accolade went not to Cyber Monday, or indeed Boxing Day. Rather, it was Strike Day, Wednesday November 30 – or the day that many UK workers took industrial action. BT Expedite and Fresca said that online sales that day were 163% up on an average day, across retailers using the FrescaCommercePlatform, and 45% up on the same day the previous year.
“Whether or not people were striking or working from home or simply unable to get to work because of the industrial action it seems many decided November 30 was a good time to do their Christmas shopping online,” said Richard Vining, head of performance for BT Fresca.
“In 2011, there were a number of peaks in orders instead of just one as in previous years. It’s striking that the week leading up to Christmas, historically a ‘no-go’ area for online Christmas shopping, is now coming into its own. Even as late as December 20, order volumes were still high, at least as high as the beginning of November. This is in part due to sharper delivery strategies, giving customers confidence their orders would arrive before the big day.”
Finally, figures from online payments provider PayPoint.net suggest, however, that retailers are this month experiencing a softer post-Christmas landing than last year, after a busy festive period.
The online payments provider found consumer spend increased by 24 percent in the first two weeks of January, compared to the same time last year, while volumes grew by 21 percent.
Michael Norton, managing director of PayPoint.net said: “As new types of e-commerce emerge and consumer purse strings are tightened, we’re seeing more and more evidence of savvy British shoppers trawling the web for the best prices. We believe this, and the recent mild weather which eases concerns over delivery times have also contributed to the continued success of our customers’ businesses. It’s very encouraging to see e-commerce holding up so strongly.”