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Beast from the East drives shoppers online: ONS and IMRG

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Shoppers turned online to buy as heavy snowfalls – dubbed the Beast from the East – arrived in the UK at the end of February, two sets of new retail sales figures out this week suggest.

Today’s Capgemini IMRG eRetail Sales Index sees a 13.1% rise in online sales in February, with a spike in the last week of the month as sales rose by 3.5% compared to the previous week, while yesterday’s ONS Retail Sales Report saw £1.2bn spent online during the month, a rise of 13.7%.

According to the ONS, sales also shifted further online in February, with 17.2% of all transactions taking place over the internet – up from 15.6% a year earlier.

Across all retail channels, estimated the ONS, shoppers spent 3.9% more in February to buy 1.5% more goods than they did a year earlier.

“Retail sales did grow in February, with increases seen in food, non-store and fuel, but this followed two months of decline in these sectors,” said Rhian Murphy, ONS senior Statistician.

“However, the underlying three-month picture is one of falling sales, mainly due to strong declines across all main sectors in December.

“Store prices continue to rise across all store types, but at a lower rate than the previous month due to a slowdown in price growth, though clothing and household goods stores continued to see stronger price rises.”

It was in the mobile channel where the IMRG report found particularly strong spending, with m-commerce sales up by 38.5% during the month. This was, however, lower than the 57% growth of last year. Sales via tablets fell by 6.7%, year-on-year.

Bhavesh Unadkat, principal consultant in retail customer engagement at Capgemini said: “February’s sales patterns clearly demonstrate the power of extreme weather on shopping habits; as people avoid the high street in favour of cosier shopping from their well-heated living rooms. As the snowy weather continued well into March we anticipate a continuation of this trend in next month’s results. We’d also draw attention to the performance of the US retail market, which has just reported its third consecutive month of falling sales. As the US market is often seen as ahead of the UK’s this could foreshadow a similar trend in the coming months. Fortunately for internet retailers, the US reported +1% online sales growth.”

At the same time, conversion came in slightly lower than last February: the IMRG detected a fall in the overall market conversion rate during the month to 4.2% from 4.6% a year earlier. That said, the average basket value (ABV) rose by £11 in comparison to last February.

Justin Opie, managing director, IMRG , said: “Over the course of many years, the overall conversion rate for online retailers crept up very slowly but this has stalled recently and has now actually been in decline for three consecutive months. This suggests that shoppers are spending more time browsing, potentially across a greater range of sites, before making a final purchase decision and that may well be true, but a clear influencing factor is a shift in the devices people are using for shopping. In Q4, 32% of online retail purchases were completed on smartphones (the rest were through desktops and tablets) – these devices tend to have lower conversion rates due to a variety of reasons, particularly how much more susceptible users are to being distracted when using them.”

The IMRG figures showed a strong rise for health and beauty sales (+33.8%) last month, while clothing (+14.9%), accessories (+22.3%) and footwear (+20.4%) were also up.

Online, food sales grew by 14% to account for 5.5% of all retail sales. The fastest growth came at department stores where sales grew by 20.7% and accounted for 16.1% of all sales. At household goods retailers, sales grew by 15.4% to account for 12.1% of all retail transactions.

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