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Internet shopping rose 17% in December to £5.46bn

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New figures from the IMRG Capgemini e-Retail Sales Index show that UK shoppers spent £5.46 billion online in December —the equivalent of £88.93 for every person in the UK, and 17% up on December 2008. Sales rose by 3.8% compared to November 2009, demonstrating typical growth for the month of December.

The peak for online Christmas shopping was the second week in December. This was one week later than in 2008, as a combination of November postal strikes, shoppers holding out for bargains, increased confidence in delivery services and Christmas falling on a Friday delayed the annual spending spree.

Clothing mirrored the overall market throughout the year, and the researchers say this sector has driven the overall Index in 2009. Accessories, gifts, health and electricals performed less well throughout the year but peaked in November and December 2009.

Compared with December 2008, there was strong year-on-year growth in all sectors tracked in the Index. Sales of accessories, gifts, electricals, and health and beauty products saw particularly marked growth online compared to last Christmas.

Consumers looking to stock up on alcohol for the festive period turned to the internet for the best bargains, spending 25% more than in November. Although clothing saw low growth compared to November, shoppers spent 18% more compared to December 2008.

“An interesting shift during this festive period is the strength of the month on month performance for multi-channel retailers (up 13%) versus their pure-play competitors (down 8%),” says Jon Parry, principal retail consultant at Capgemini. “This shows both the high value consumers place on a multi-channel proposition, particularly when it comes to gift returns, and the trust advantage our high street brands have if they can get their online proposition right.

“A key trend highlighted by our index analysis is the 25% drop in conversion rates from 2008 to 2009,” he added. “This is a clear reflection of the increased traffic using the internet as a source of product information and recreation, accelerated by the increase in retail content on social network sites such as Facebook. This highlights the significant opportunity on the table for retailers to enhance their online customer experience.”

“The latest Index figures prove yet again that online shopping thrives on adversity,” added James Roper, chief executive of IMRG. “The sector managed to deliver strong double-digit growth in 2009 despite the economy being in recession, aggressive high street competition, extreme weather and even postal strikes in the run-up to Christmas.”

“2010 looks set to produce another year of strong results for e-retail, with demand expected to remain high as consumers habitually look online for best buys, and a pipeline of significant improvements emerge, including wider product range availability, even better websites and a greater choice of convenient and more reliable delivery options,” he predicted.

The growth levels for multichannel retailers and online-only retailers diverged in December for the first time last year. The Index for online-only retailers fell by 7.6%, whereas the Index for multichannel retailers rose by 13% month on month. This can be attributed to multichannel retailers (such as large department stores) offering guaranteed delivery for Christmas later in the month.

Although following a downward trend throughout 2009, the average conversion rate for online retailers rose slightly in December, with almost one in 20 visits to websites being translated into actual purchases. This was higher for online-only retailers, who managed to convert an average of one in sixteen visits in December.

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