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Online sales growth stalls following pandemic: IMRG

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Online sales in April 2022 were 12% lower than a year ago, according to the latest IMRG Capgemini Online Sales report. That’s a significant improvement on the previous month, when sales were 25.7% lower than in March 2021, when the UK’s non-essential retail shops were closed for the full month. Those shops started to open in April 2021 – and online sales have been in steady decline ever since. Last April, sales were 12% up on the previous year – a gain that is reversed in April 2022. Last April, non-essential retail opened from the third UK lockdown on April 12.

This year, however, average basket values are growing – reaching an all-time high of £146 in April 2022 – in a way that probably reflects the rising cost of living and high rates of inflation. Shoppers, says the IMRG Capgemini index, are now taking longer to decide on purchases and retailers are discounting more heavily to prompt sales. That rising ABV, says IMRG, is £3 above the previous record – set in August 2021 – and reflects shoppers’ willingness to buy in bulk for a discount or to buy larger ticket items.

Andy Mulcahy, strategy and insight director at IMRG, says: “Throughout the pandemic, there was much speculation as to what the ‘new normal’ might be once everything has settled down again. After two years of huge volume increases online, it would seem that growth is now over – this is not just a reflection of the pandemic effectively coming to an end in many people’s minds, the new phase of higher costs and bills is creating very unpredictable patterns of behaviour among shoppers. Many retailers report sluggish response to activity and erratic spending, and it feels like this is only the start of a tough year for UK shoppers.”

Clothing is seeing stronger post-pandemic sales, with year-on-year growth reaching 4.2% in April – a year after posting growth of 51.4% in April 2021. But electronics (-17.8%) and beauty (-27%) both fell back. IMRG says a consistent fall in average basket values suggests that retailers in the category may be discounting heavily.

Lucy Gibbs, senior manager, retail lead for analytics and AI at Capgemini, says: “Demand for certain categories became less predictable during the pandemic due to external factors and changes in behaviours and lifestyles. As we start to move on, we are seeing some signs of a return to norm, however it is clear that shifting priorities around new cost pressures and economic factors will also influence future demand patterns. If we project forward the pre-pandemic trends we can infer which categories are still over-performing; home and garden and health and beauty are still well ahead of where we would expect them to be despite tracking negative YOY growth for this month. Clothing is approximately in line with where we would expect, picking up after losing out in the pandemic.

“As uncertainty continues to reign, this reinforces that retailers and brands will need to remain agile and resilient – listening to customer needs, where consideration will likely now focus on price point, necessity and value, to create a standout experience and drive other factors to maintain loyalty.”

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