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A change in the way we shop: November retail sales figures from the ONS and IMRG

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Shoppers’ spending stayed flat in November – but more of the money they did part with was spent online, according to official figures out today.

The Office for National Statistics’ (ONS) retail sales figures for November 2012 detected a marked transition of spending to online in the month.

“While consumers continued to spend approximately the same amount as they did last year,” said the ONS statement, “this year they spent more online and less in store.”

The figures showed that while the value of total UK retail sales rose by 1.5% and the volume of sales rose by 0.9% in November, compared to the same time last year, a rising proportion of total spending went online. Some 10.8% of all retail spending took place online. That’s 1.4% up compared with October 2012, and 0.5% up compared with November 2011.

The ONS estimated online sales at an average of £710.9m a week in November 2012, 8.1% up on the £658m spent on average each week in November 2011.

Meanwhile, the IMRG Capgemini Sales Index showed a more optimistic 18% boost to online spending in November. It said UK shoppers passed a key online milestone in November, spending more than £8bn for the first time. The £8.4bn spent online in November was also 25% more than in October 2012.

The figures paint a more upbeat picture than those from the BRC-KPMG Retail Sales Monitor earlier this month. That research detected relatively subdued sales growth, with a 7.5% uplift in online sales in November compared to the same month last year. Those figures were also closer to today’s ONS estimates. It’s worth noting the IMRG’s broad definition of online sales as “transactions completed fully, including payment, via interactive channels from any location, including in-store.” It takes data from more than 100 online and multichannel retailers, including, Marks & Spencer, John Lewis, Debenhams and Asos.

Unveiling the IMRG figures, the etail trade association’s chief information officer Tina Spooner said: “The robust Index performance in November is a clear indicator that festive shoppers are using the internet more than ever before in the run up to Christmas. With an increasing number of online retailers offering next-day delivery services, Click & Collect and later last order dates for guaranteed delivery before Christmas Day, even last-minute shoppers can enjoy peace of mind when buying their festive gifts online.”

Chris Webster, head of retail consulting and technology at Capgemini says: “These results are particularly strong and gives a clear indication of what we can expect to see during the peak shopping weeks in December. E-retail continues to be the growth engine of an otherwise struggling retail sector and as online spending exceeds the £8 billion in one month, we can see just how integral the online and mobile channels have become to the shopping experience.”

Mobile sales showed particularly strong growth, rising by 309% on last year. Conversions from mobile devices rose by 2.1%. Spooner said: “Britons’ soaring use of smartphones and tablets is also evident in the Mobile Index results, and confidence in the channel is clearly growing. The conversion rate of 2.1% is the highest recorded yet and a sure sign for retailers that mobile has to form a key part of their strategy going into 2013.”

Categories that showed particularly strong growth included accessories, up by 36% year on year, and 83% compared to the previous month of October 2012, gifts (38% year-on-year and 132% month-on-month), lingerie (24% YOY, 61% MOM), and health and beauty (12% YOY, 82% MOM).

Gareth Jones, group retail and strategy director at Shop Direct Group , said: “November was a solid month for the Shop Direct Group brands, with overall sales up 2.5% on last year against strong comparatives.

“Our strongest performing categories during the month were footwear and accessories and electricals, which were up 9% and 10% respectively year-on-year. With the cold, wet weather really starting to take hold, it was no surprise that footwear and accessories performed well after a relatively quiet September and October.

“The mobile revolution also continued at speed during November, with sales from smartphones and tablets representing 24% of total online spend. That represents phenomenal year-on-year growth of more than 250% – a trend that shows no sign of slowing.”

Omid Rezvani, director of mobile solutions at eCommera , said: “As we close out 2012 and compare the IMRG m-Retail index with 12 months ago then it is quite clear that mobile transactions are now firmly established as part of the overall consumer purchasing path. We have spent much of the year encouraging retailers to embrace the mobile web and the mobile app to ensure they don’t become casualties of this transition.

“Looking ahead to 2013 we would urge retailers to be taking the next step – that of becoming truly customer-centric – with their marketing, their back-office systems and their online and offline organisation all harmonised to deliver an exceptional end-to-end customer experience – every time, everywhere. A worthy New Year’s resolution.”

Alison Wade, head of marketing at comments: “November followed October’s strong trend with overall business growth achieving +27% on November last year. Traffic to grew by 23% year on year and we experienced an uplift in average order value by 10% due to a strong product offering around the £99 price point. In November we released version 2 of the Buyagift mobile site which has resulted in a positive impact on conversion and we anticipate this will continue through December and the New Year.”

Zak Edwards , managing director at online gift retailer Prezzybox , said: “November was fantastic for Prezzybox as we witnessed 55% year-on-year growth. Success was largely attributed to an aggressive social media and search marketing campaign, together with additional website functionality being introduced such as a ‘Save for Later’ feature and a ‘Secret Santa Gift Finder’.”

Our view: It’s not how much shoppers are spending it, but how they are spending it that’s interesting about this month’s retail sales figures. The ONS figures, out today, detect a distinct movement online, while the IMRG figures show a clear rise in online spending.

However, we’d also like to take the occasion to address a signficant difference in the rise in online spending in November as measured by the ONS (8.1%), BRC (7.5%) and IMRG (18%). While the ONS and BRC figures are broadly similar, the IMRG figures show much stronger growth.

It seems to us that the IMRG figures measure the sales of more than 100 retailers who, by virtue of the fact that they take part at all, are likely to be among the most committed and successful. They also echo Experian figures from Cyber Monday (December 3 2012) that showed 62% of the website visits that took place that day went to the top 100 websites in the industry.

We see a possible connection here. Could it be that the IMRG figures are detecting that same trend of breakaway growth from the leading players in the industry, rather than the somewhat less impressive average growth across ecommerce retail in general? It’s worth pondering. Let us know what you think in the comments below.

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