Shoppers in the UK spent a total of £6.8bn online during December, 25% more than December 2009, according to the latest figures from the IMRG Capgemini e-Retail Sales Index.
ONLINE SALES in December were up 7% on November’s figures with an average of £111 being spent by every shopper. The £6.8bn spent overall rounds off what has been an impressive year for online retail.
A total of £58.8bn was spent online in 2010, which resulted in the IMRG Capgemini e-Retail Sales Index increasing by 18%, far outstripping the original prediction of 13%. For 2011, IMRG and Capgemini have predicted the Index will see a further 18% growth, with total e-retail sales estimated to be worth £69bn.
The December figures showed that despite the dire predictions during the run up to the festive season, online retailers had a very successful Christmas, resulting in an above average yearon- year growth in nearly all sectors. This impressive growth can be attributed to two major factors, the impending increase in VAT and of course the coldest recorded December in the UK for 100 years.
It seems that as the snow fell, shoppers across the country opted to buy online, instead of battling the elements to the high street. This trend had a positive impact for all online traders, including those with a multichannel proposition;
House of Fraser reported 120% growth in online sales compared to the same period the year before. Similarly, John Lewis and Marks & Spencer reported exceptionally strong results.
In terms of specific sectors, the harsh conditions had an inevitable impact on sales for clothing, footwear and accessories. As the country looked to wrap itself up in winter coats and chunky scarves, the sector saw a year-onyear increase of 40%: the strongest growth for this sector for 19 months. Clothing retailers also experienced a massive 50% leap in conversion rate, suggesting consumers are not just surfing the internet to window shop, but researching the best price and placing an order.
Another noteworthy sector is alcohol, which, in keeping with the festive and party season, saw the largest growth, boasting a massive month-on-month leap of 32%. What’s a little less expected is the year-on-year growth as the sector saw a significant 36% increase from December 2009.
Chris Webster, Head of Retail Consulting and Technology at Capgemini says: “Online sales in December have grown again off the back of a very impressive November. This is down to two main reasons. Firstly, the spike in sales can be attributed to the season; not only is it traditionally the strongest month for retail but coupled with the heavy snow fall clearly led to many consumers staying at home to do their Christmas shopping. Secondly, the ongoing trend of consumers putting down the car keys and turning on their computers is only set to continue particularly as consumers use the power of the web to make their money go further as the economy recovery remains fragile.”
James Roper, Chief Executive at IMRG, comments: “December saw an incredible jump in online sales as a result of the weather conditions and it’s reassuring to see that despite the coverage of delivery problems, consumer confidence was not affected. Growing confidence and reliance on e-retail during times of adversity, whether that’s harsh weather conditions or belt-tightening as a result of the economy, has been reflected in the impressive growth throughout 2010.”
Amongst the retailers reporting strong December trading is John Lewis and the company has no doubt that its website played a vital part in its success over the Christmas and Clearance period. “The hard work our team put in over the year to develop the website really paid off, especially when snow affected trade at many of our branches. The increase in online sales, especially during the adverse weather in early December, demonstrated just how important the website has become to our customers,” says Jonathon Brown, Head of Online Selling, John Lewis.
John Lewis’ online sales for the five weeks to 1 January 2011 were 42% up on last year and several trading records were achieved. “We have also now passed the £500m mark for online sales for the year,” says Brown.
Meanwhile, technology, fashion and home improvements were key drivers making 2010 a bumper year for Shopping.com, which saw overall growth in December at an average 24% year-on-year.
Bjorn Kvarby, European Managing Director, Shopping.com, comments: “Despite the recession leading to conservative forecasts for 2010, consumers proved that although they may be watching the pennies, they are becoming cannier that ever, attracted to the money and time savings they find when shopping online. Innovative product launches like the iPad have re-ignited consumer interest in the latest technology gadgets, with eBooks and Tablet PCs accelerating growth of our computer category at 50% year-on-year. Secondly, fashion leaped forward with average growth of 45% in December, year-on-year. Finally, with the uncertain property market, consumers turned to updating their homes themselves, with building supplies and home furnishing achieving average growth of 43% year-on-year. The momentum behind online shopping means we’re remaining quietly confident for 2011.”