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New August figures suggest online sales growth of recent months starting to slow

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The first signs of a potential slowing in the strong online sales growth of recent months appeared in August, new IMRG figures suggest, as shoppers started to return to more face-to-face lifestyles in response to government encouragement and schemes such as Eat Out to Help Out. Now, says the etail trade organisation, the next questions are about whether the consumer shift online during Covid-19 will continue to be seen, and how big Black Friday will be online this year. 

Ecommerce sales last month grew by 43.5% compared to the same time last year, according to the latest IMRG Capgemini Online Retail Index, but they were down by 4.1% compared to the previous month of July.

At the same time, the longer-term trend shows growth starting to abate, with August sales still well ahead of rolling averages calculated over the last 12 months (+22.6%) and six months (+38.1%), but now slightly lower then the three month average (+44.95%). 

Multichannel retailers (+70.5%) fared better than their online-only counterparts (+11.4%) according to the index, which tracks the online sales performance of more than 200 retailers. 

Andy Mulcahy, strategy and insight director at IMRG, said: “Now that we are coming out of summer, all attention is inevitably focused on the Black Friday and Christmas period. The big question is just how big Black Friday will be online this year. With most types of business open again, and people being actively encouraged by the Government to return to their offices, are we starting to see some signs of online and offline sales balancing out again?

“The evidence has a big caveat as, while it’s true that the August rate of growth was a bit lower than it had been over the past three months, it doesn’t necessarily mean online growth is slowing down. The Eat Out to Help Out scheme ran through August and had a big take-up, bringing people back to the high street. Now that is finished, will they stay there, or has behaviour evolved more fundamentally than that?”

Shoppers appear to have started to shop for a more face-to-face lifestyle, as school children and some office workers returned, and restaurant visits and other social activities increased. Clothing sales were up by 6.8% year-on-year – ahead of the 0.6% growth seen in July. But footwear sales fell by 10.7% at the same time. Gardening sales rose by 286.1%, perhaps reflecting periods of warm weather seen during the month. 

Lucy Gibb, managing consultant, retail insight at Capgemini, said: “As summer comes to a close, we have seen a slowdown in the growth online and we expect to see some shifts in the category spending as we move into autumn. In particular, clothing seems to be returning to positive growth, boosted by the return to school and offices as well as further mobility, however this may not be enough to capture the total lost sales during the summer pandemic period. Footwear, for example, is the only category to remain in negative growth since March, impacted by events and reduced wear throughout lockdown.

“The disrupted seasonal trends, and higher proportion of spend online has had a disproportionate impact on retailers without diverse product ranges or a strong online offering, and challenges in planning and supply chain. Retailers will need to remain reactive and innovative to prepare for the upcoming months; Government incentives have worked well to ignite spending on the high street, so with low consumer confidence and ongoing economic uncertainty, the discounting period around Black Friday could prove to be significant to regain sales. As many consumers have now shifted online we can also expect a significant growth in ecommerce during the festive period.”

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