Close this search box.

2018 set to be ‘tougher’ for online retail: IMRG

This is an archived article - we have removed images and other assets but have left the text unchanged for your reference

Online sales fell behind expectations in 2017, the IMRG said today, as it warned of a tougher year in 2018.

Full-year ecommerce growth came in at 12.1% in 2017, short of the 15.9% enjoyed in 2016, and of IMRG’s forecast of 14% for the year. Next year, says the e-retail trade association, internet sales are now expected to grow more slowly at 9%. This is the first time the IMRG’s annual forecast has fallen to single digits – and anticipates a continuation of the 9.1% growth rate seen in December compared to the same time last year.

Mobile sales growth slowed, with sales falling by 50% in the six months between July and December. That contrasts with growth of 77% in the same period in 2016. Over the course of 2017, sales via tablet computers stalled, growing by just 0.7%. In 2018, predicted the IMRG, growth will slow further over all devices.

Justin Opie, managing director of IMRG said: “A decline in the rate of online sales growth in 2017 was forecast, though it turned out to be sharper than expected. The macro economic factors – rising inflation, low wage growth, rise in the interest rate etc – are likely to have been influential and the first half of 2018 may be challenging too; discounting in the lead-up to Black Friday started deep into October in 2017 and have been widely available ever since.

“It may be that retailers will now find themselves caught in a cycle of discounting, which also happened in 2011 and 2015 and will probably extend long after the January sales, as the trading climate is tough at the moment. That said, 2018 does look set to be a transformational year for retail – with an increasing use of AI services anticipated plus the rise of ‘browserless commerce’ (through devices such as voice assistants). It may be that we see shopper behaviour shift significantly over the coming period.”

Slowing sales, said IMRG, could be consistent with an ongoing three-year bounce pattern of growth. Peaks were seen in 2010 – potentially as website load speeds and connectivity improved – 2013, with the growth of tablet computers, and 2016, as shopping via smartphones took off. If the pattern continues, it said, a new stimulus may be entering the market in 2019.

Bhavesh Unadkat, principal consultant in retail customer engagement, Capgemini , said: “2018 will be ultra competitive with continued uncertainty, retailers will therefore need to be focused on their plans to both survive and grow. One opportunity for growth and differentiation will come from emerging technology as we saw as a focus in 2017 – voice and social commerce, connected devices and AI all drove interest and investment and will continue to do so – the big challenge will remain as how to drive value and industrialising this capability. A second opportunity will be deepening relationships with customers and taking an insight driven approach to omni-channel retail – one which arguably remains a gap for many retailers across channels. Many have got it right across certain channels, however not across the whole customer experience across all channels.

“Finally, there is sometimes so much focus on technology and innovation we can forget retail basics – ensuring the product mix is right, availability is on point, the shop front is one to be proud of, and ensuring the team are well equipped to give customers the best service can be just as important. 2018 will be volatile but very exciting as we see the great retail industry again raise the bar!”

Read More

Register for Newsletter

Group 4 Copy 3Created with Sketch.

Receive 3 newsletters per week

Group 3Created with Sketch.

Gain access to all Top500 research

Group 4Created with Sketch.

Personalise your experience on