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January online sales sharply down on last year’s ecommerce boom – though shoppers may be starting to spend more: IMRG

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Ecommerce sales were sharply down in January compared to a year earlier when Covid-19 lockdown closed non-essential stores and pushed shoppers to buy online, IMRG figures suggest. This January, when shoppers were freely able to buy in-store, online sales were almost a quarter lower than they were a year earlier, according to the January IMRG Capgemini Online Retail Index.

At the same time, spending appears to have risen compared to last month, with average basket sizes rising by more than £20 – or 24% – since December. However, warns Capgemini’s Lucy Gibbs, this may prove to be an earlier indicator of rising retail prices.

The 24.4% fall in January’s online sales puts them below the long-term trend. Online sales in the three months to January were 16.4% lower than the same time last year, while the six-month (-13.7%) and 12 month (-2.8% ) averages are also marked by lower declines. IMRG says the decline marked the lowest rate of online growth that it has seen in 22 years of tracking the performance of more than 200 multichannel and ecommerce retailers. But the decline must be set against the 61.8% rise seen last January, compared to the previous year, which amounted to a lockdown ecommerce boom.

Andy Mulcahy, strategy and insight director at IMRG, says: “The first quarter of 2021 had a severe lockdown in place which drove huge online growth, so the year-on-year comparisons for the early months in 2022 are going to be harshly negative as a consequence. This can make it seem like online sales are in freefall, whereas actually it is just a natural rationalisation of the 50-60% increases we saw this time last year.”

Spending rises

At the same time, average basket values rose by 24% in January, rising to £115 from £106 in December – after having been in decline since August. The strongest sales were in fashion, where clothing sales rose by 5.4% on last year, including strong rises in womenswear (+25.2%), menswear (+16.0%) and footwear (+19.4%). However, clothing was a relatively strong performer – having seen declining sales during lockdowns. At the other end of the scale, skincare sales fell by almost half (-48.2%), while makeup (-45.7%), and electricals (-36.7%) also saw a fall in year-on-year (YoY) online sales.

Lucy Gibbs, senior manager, retail lead for analytics and AI at Capgemini, says: “January was a mixed story for retail; our Online Index reported the largest YoY fall in sales ever, and the high street claimed the opposite. This is due to the now familiar yin yang effect on YoY revenues when comparing to last year’s lockdown store closures. As we emerge from the pandemic, the annual results will start to normalise and 2022 will hopefully bring a much more stable trading period, however the outlook still remains uncertain as we realise the fall out of economic and logistical challenges from the last two years.

“The drop in orders this month is greater than revenue as ABV has increased by 24%. This could be an early indicator of increased prices, reflecting the ongoing supply chain disruption and underlying cost challenges. The GFK major purchase index has also fallen four points in January, as economic pressures add to consumer concerns. Capturing share of wallet amongst increasing bills and also pent-up demand for travel, events and eating out will continue to prove to be the focus as we navigate 2022.”

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