Online shoppers spent less in October than last year, but more than in September, suggesting that Christmas spending is underway: IMRG

Online shoppers spent 3.4% less in October than a year earlier, but 11.7% more than a month earlier – suggesting that Christmas spending is already underway, the latest IMRG/Capgemini figures suggest. Figures from the IMRG Capgemini Online Retail Index suggest that shoppers have been spending more than last year on furniture but less on gifts, electrical and homewares as they trade own to more value products. 

However, while traffic to online retail sites in October was 2.1% up on last year, the conversion rate is still 20% lower in 2021. The IMRG Capgemini Online Retail Index is predicting that spending in November will to be lower than last year. 

Andy Mulcahy, strategy and insight director at IMRG, says: “The gifts category gives us an indication of the challenging trading environment at the moment; it is experiencing declines of –20% and more in some weeks; this comes on top of declines of -30% for the same weeks in 2021. Shoppers may really tighten their spend in areas such as gifts, which isn’t great news for Christmas demand.

“Furthermore, the timing of the chancellor’s autumn statement, currently scheduled for the Thursday before the start of Black Friday ‘week’, and where many expect the announcement of tax rises, it seems likely that shopper confidence will be dented further at the worst possible time for retailers.”

Furniture (+2.9%) performed most strongly in October, according to the IMRG/Capgemini index, although shoppers appear to be taking a value approach to buying, with premium brands growing more slowly. Sales of clothing were flat last month, while there was year-on-year falls in spending on health and beauty (-7.2%), electrical (-7.6%) and home and garden (-5.1%). 

Simon Binge, commerce senior manager, customer transformation at Capgemini, says: “Even in categories that are bucking the trend for October, like furniture, we can see clear evidence that the macro-economic environment is having an impact on consumer behaviour.  Whilst furniture was up +2.9% YoY, we can see that this growth is being driven by budget (+7.8% YoY) and mid-market (+9.8% YoY) retail categories, whereas the premium category is down a rather scary -42.8% YoY. The trend of trading-down can also be seen across home and garden, gifts, and clothing where the budget and mid-market categories are outperforming their premium counterparts.”