British shoppers spent £4.2 billion online in October, according to the latest IMRG Capgemini e-Retail Sales Index, but growth in online sales slowed during the postal strikes. Overall, October saw both a year on year of 11.8% and a month on month growth of 8.4% in online retail sales.
Growth dipped significantly in the last two weeks of October during the postal strikes, however. After a strong start to the month, growth fell by 2% per cent and then plunged a further 5% in the space of a week.
Delivery concerns had a noticeable impact on online clothing sales, where yearly growth of 13.2% fell short from the average of 27% for the month of October in previous years. “Many shoppers turned away from online stores and returned to the high street to avoid delays in getting their winter wardrobe and festive party outfits,” says IMRG Capgemini.
“In contrast, the potential delivery delays had a positive effect on e-retail sales for gifts as shoppers spent a massive 113% more in October compared to September and 40% more compared to October 2008. This is due to consumers buying Christmas presents earlier to avoid empty Christmas stockings and gift e-retailers also kicked off festive promotions much earlier compared to previous years.”
“E-retailers must ensure they heed the October warning signs and act to reassure consumers that orders will be delivered in time for Christmas,” says Mike Petevinos, head of consulting for retail at Capgemini UK. “With consumer confidence restored, e-retailers can get on with the real challenge of convincing consumers to spend online and resist the temptation to wait even longer for last minute discounting on the high street. Ironically, careful tactical online promotions may be the route many adopt.”
“Whilst the overall Index returned to double-digit growth in October, the decline in e-retail sales values and volumes during the second half of the month shows that consumer confidence was affected by the Royal Mail strikes,” adds Tina Spooner, director of information at IMRG. “However, with the threat of further strike action now averted in the run up to Christmas, shoppers’ concerns around delivery will no doubt be dissipated. It remains to be seen whether consumers will play a waiting game over the coming weeks as they look for the best bargains online in the hope that retailers will begin discounting as Christmas approaches.”