Online retailing continued to grow strongly over the Christmas period and throughout 2016, according to the IMRG Capgemini eRetail Sales Index. Emma Herrod reports on the figures.
A MASSIVE £25bn was spent online over the six week Christmas period from 13 November through to 24 December, according to figures from the IMRG Capgemini eRetail Sales Index. This represents a rise of 16% on the amount spent in 2015 as consumers continued to turn to the internet for their Christmas presents.
Over the year, £133bn was spent online with UK retailers, £18bn more than the amount spent in 2015. This helped the industry to a growth rate of 16% for online retail in 2016. The result demonstrates an exceptional performance for online retail in 2016, exceeding IMRG and Capgemini’s forecast of 11% growth for the year and reversing the trend of declining growth rates for the past few years.
For 2017, IMRG and Capgemini forecast online retail will record a further 14% growth.
The strong performance of online retail in 2016 was fuelled by the continued growth of sales made on smartphones, which saw phenomenal growth over the year. In December, sales made via smartphones were up 47% year-on-year. In contrast, sales made on tablets were down 3%. In December, smartphones accounted for 54% of mobile device sales, with tablets accounting for the other 46%. This is a huge uplift on December 2015, when smartphones accounted for 39% of mobile device sales. On Christmas Day itself, over 42% of all online sales were made on smartphones.
Sales on mobile devices have been growing in recent years but sales from smartphones have been increasing their share against tablets since the launch of the iPhone 6 and 6Plus with their larger screens. Conversion rates from smartphones doubled in 2016.
” 133bn was spent online with UK retailers in 2016.”
Sean McKee, Director of Ecommerce and Customer Experience, at footwear retailer Schuh agrees with the IMRG’s finding. He comments: “The bigger the screen, the better the conversion rate.”
Looking at the Christmas period, Black Friday again was an online event with the industry recording a sales increase of 12% over 2015’s figures. Most of the leading retailers took part in Black Friday with many extending promotions into a week-long event starting on the previous Monday. “It’s a deliberate ploy to extend Black Friday over a week to take out operational issues,” says Michael Durbridge, Director of Omni Channel, B&Q [IRDX RDIY].
Dom McBrien, Multichannel Director, The White Company agrees. “It alleviates the pressure on DCs by extending Black Friday to a week,” he says.
“Black Friday became an ‘online’ event in 2015, and this seems to have had a lasting effect on people’s shopping behaviour and preference – our Index has recorded strong growth for online sales ever since that day,” says Justin Opie, Managing Director, IMRG.
Bhavesh Unadkat, Principle Consultant in Retail Customer Engagement Design, Capgemini, comments: “2016 was a turbulent year with a number of predictions for retail and beyond going against the status quo. Regardless, it was still a record breaking year for online sales – up 16% in 2015. Few would have anticipated the decline in sales made on tablets, but with sales made through overall mobile devices generating over 50% of visits, combined with the sweeping growth of both visits and conversions from smartphones, mobile continues to head towards being the number one sales channel.
“2017 will be filled with a level of uncertainty depending on the progress and impact of Brexit. However, with the investment retailers are making in improving the customer shopping experience, I am sure it will be another record breaking year for online sales.”