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Online sales grow by 9% in ‘wettest April since records began’

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Online sales grew by a lacklustre 9% last month, British Retail Consortium figures showed today, as “the wettest April since records began” failed to inspire shoppers.

The growth in ecommerce came as high street sales fell back, with total retail sales down by 1%, compared to last April, and down by 3.3% on a like-for-like basis.

According to the BRC-KPMG Retail Sales Monitor April 2012, the growth in online sales was the weakest since November 2011. The weakness was partly explained by a strong April 2011, but, said Stephen Robertson, director general of the BRC, the figure is indicative of a trend.

“The general trend for online retail is a slowing rate of growth, which is a sign of the market maturing,” he said. “Growth of 9% for this April is respectable but well behind the increase of almost 14% for the same month last year. There’s major growth in sales being made via mobiles, but that’s still a very small proportion of all the business being done.

“You’d think relentless downpours would help online retailing as people shop more at home, and there was some extra interest in gear for cold and wet weather but any gains there were more than offset by people switching away from summer goods and by continuing consumer caution.”

He said consumers, cautious about their finances, remained reluctant to spend unless they had to. They were turning back to winter foods and clothing in the downpours.

Helen Dickinson, head of retail at KPMG, said April sales were always going to struggle against the strong sales figures seen in April 2011, which benefited from a late Easter and “glorious sunshine”.

She added: “Taking April and March together, like-for-like sales are in negative territory and any growth in total sales is coming from inflation. The sector is undergoing structural change as our desire to consumer ever more goods diminishes and technological advances continue to change the way we shop.

“While May will certainly be brighter than April, the health of the retail sector continues on a downward trajectory.”

Looking ahead, Joanne Denney-Finch, chief executive of food and drink sector analysts IGD, said: “Our shopper research tells us to anticipate a rollercoaster of sentiment during 2012. Food companies will now be hoping the Queen’s Jubilee celebrations bring a feel-good factor to the country.”

Adam Stewart, marketing director at Rakuten’s Play.com, said: “The weather can have a huge effect on retailers, and the wettest April ever is being blamed for last month’s poor sales figures. One way retailers can negate the effect of the weather is to ensure they have a genuine multichannel approach to retailing. It doesn’t rain online, so while the wet weather may discourage people from heading out to the high street, this means they are likely to be at home surfing the web. If the online experience a retailer provides is as positive as the in-shop experience, they don’t have to miss out on valuable sales. Savvy retailers could even use this to their advantage, with online deals on items like coats and macs to help them shift winter stock.”

 

3 comments on “Online sales grow by 9% in ‘wettest April since records began’

  1. Pingback: It never rains: increasing ecommerce conversions even when conditions are slow « Locayta's Blog

  2. For retailers already wrestling with the effects of the recession, April’s bad weather and its impact on consumer spending would have come as another blow. But these things are cyclical. Of course the economic downturn and the poor weather conditions don’t help, but it is too simplistic to blame retail’s problems on these issues alone.

    We are in the middle of a retail revolution. Our customers no longer compromise on the products they buy because everything is available at a click of a button. And retailers are getting caught out, left standing with excessive inventory they are constantly marking down by 50-70% because they didn’t understand their customer
    Yet, not all retailers are falling into this trap. Some of the larger high street stores, like John Lewis for example, as well as many of the smarter small independent shops are bucking the trend and continuing to do well.

    So how can other retailers mirror their success? The first thing they need to do is to stop shooting themselves in the foot by running a chaotic back office. There is no excuse for failing to run an integrated, efficient merchandising software package that helps everyone cost and visualise the next stock commitment.
    In tandem with this, it is time that retailers get back to knowing and understanding their customers properly. Good merchandising software will actually make them do this and apply the knowledge all through the early planning and visualisation. Retailers need to realise that the weather and the recession are temporary, but if they approach it in the right way good practice in terms of customer engagement and back office processes, can be promised.

    Christina Grzasko, managing director, Anya Media

  3. Pietro Leone, CEO, G2 EMEA said:

    The findings of the British Retail Consortium are concerning, but have been diagnosed as a result of phenomena over which retailers have little control. What is clear therefore is that retailers need to create compelling sales strategies that supersede foreseeable and unforeseeable events, such as the famed British weather.

    Having a multichannel offering is key. Consumers are seeking relevant and meaningful brand experiences that add value to their purchasing experiences – irrespective of the channel they are shopping in.

    So the challenge for retailers is to engage their customers – outside of short-term strategies such as discounting – in order to build an enduring relationship with their brands. Having a long–term vision for a brand across every consumer touchpoint – is critical to their survival, mitigating the risks that the economic climate dictates and ultimately proven to generate more sales.

    Pietro Leone, CEO, G2 EMEA

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