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Second half online sales growth forecast revised downwards

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The latest IMRG Capgemini e-Retail Sales Index shows that year on year sales for the month of June rose by 12.3%, but that the rate of growth is slowing as sales in June fell by 1.3% compared to May. As a result, IMRG Capgemini says its forecasts for online retail growth have been revised down from 15% to 12% for the second half of 2009.

The Index also suggests consumers are doing more window shopping, with the average conversion rate declining from 7-8% in 2007 to 5-6% in 2008, and now to 4-5% in the first half of 2009. Mike Petevinos, head of consulting for retail for Capgemini, explains: "Greater levels of competition and an increased propensity of consumers to research before they buy will put pressure on conversion. However, this level of decline highlights a clear opportunity for retailers to improve customer experience through their online stores in order to capture their purchases."

Sales for clothing online have consistently performed ahead of the market over recent months, with shoppers spending £2.1billion online in the first half of 2009. IMRG Capgemini's analysis finds that the standout performance of this sector is due to the advanced range of products on offer, improved visuals, more reliable, cost effective returns policies and a stronger link between high street and online offers. Over the history of the Index, clothing has been the flagship sector, inspiring other sectors to take its lead.

The electrical sector has also seen marked success, sustaining between 16% and 22% year on year growth. This strong performance, says IMRG Capgemini, is due to more mature retail offerings such as 'click and collect' and the increased number of retailers, particularly the large supermarkets and department stores, using online as they diversify their ranges into the electrical sector.

The Index shows that online sales for alcohol and lingerie contracted over the first half of 2009. Whilst month on month Index values show a general small increase, year on year sales have been down in the months of March, May and June for the Beers, Wines and Spirits sector and down in each month of 2009 for the Lingerie sector.

Gifts, meanwhile, are up 14% month on month and 3% on the year, while the Health & Beauty sector continues to put in a solid performance, up 3% on May and up 31% on the year.
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