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Online spending up 19% in January, says IMRG

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“Online shoppers are still not being put off by the recession as spending in January rose by 19% compared to the previous year,” the IMRG Capgemini e-Retail Sales Index reports. “This is an increase from the stable 15% growth seen throughout the second half of 2008.”

The Index reveals considerable variation between different market sectors. Clothing, footwear and accessories were up 32% on a year ago and electricals were up 22%. Gifts were up by only 18%, however, health & beauty by 16% and beers, wines and spirits by only 13% on last year. Lingerie was down 27%.

Monthly growth in online spending fell for the second consecutive month, however, in line with the seasonal trend experienced in previous years of a January dip after the Christmas shopping surge.

Clothing, footwear and accessories had the smallest fall in growth compared to December, reflecting the fact that it is less seasonally-volatile than other sectors. The monthly decline was strongest in the beers, wines and spirits sector, where consumers spent 62% less than in December. The gifts sector also saw a marked decline in growth by 61% showing that, while they may have been making the most of January sales, consumers were purchasing personal items rather than presents.

“Our January results show that consumers are increasingly seeing online as the place to shop in the current environment, with year on year growth of nearly 20% for the month,” says Mike Petevinos, Capgemini UK’s head of consulting for retail. “Key drivers of this growth have been the electrical and clothing segments, reflecting the post-Christmas sales effect on consumer spending.”

“So what does this mean for retailers? The strong performance of online points to a continued need to invest in the development of their ecommerce propositions,” he added. “The question is whether bricks and clicks retailers can prioritise this sufficiently above the defensive strategies needed to combat tough high street trading. If not, the risk of widening the gap versus their pure play rivals will be inevitable.”

Jo Evans, managing director at IMRG, said: “During these challenging economic times it is clear from the latest Index results that consumers are continuing to use the internet to their advantage. This is especially apparent when it comes to searching out the best available deals and promotions. Recent research shows that online searches for discounts have soared by over 100%, a clear indication of how consumers are becoming more price sensitive.”

“We continue to see a major shift in the way consumers shop as more and more are realising the benefits and savings in both time and money when shopping online,” Evans added. “However, consumers’ higher expectations, together with more sophisticated shopping patterns, mean that retailers must both fully understand their market and customer base in order to stay ahead in this challenging climate.”

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