Stronger than expected year-on-year ecommerce figures have been driven along by greater use of smartphones and the growing influence of voice assistants, according to the latest figures from the IMRG Capgemini e-Retail Sales Index.
While UK online retail sales were up +13.9% year-on-year in January, The range of devices available for carrying out online shopping has exerted a strong influence on growth patterns in our online retail sales index, says Andy Mulcahy, Strategy and Insight Director at IMRG.
“Over the past few years, smartphones have been the major drivers of growth in the index, with revenue up 39% through these devices in January 2018,” he says. “However, that rate of growth is gradually slowing down, as is common when it has been at a very high level for a period – in January 2017, for example, the rate of growth was 48.5%. Voice assistants might be the next device to have a serious impact on shopper behaviour, but equally it could be something like direct purchasing through social networks.”
Rain starts play
The weather also helped. With rainfall above average in January, and the lowest January high street footfall recorded in five years, consumers turned to online shopping this January. Even the expected post-Christmas month-on-month (MoM) decline in sales from December to January, which came in at -20.4%, was less than the five year average of -24.1%.
With January sales still an important market stimulus, the electricals sector performed well relative to recent trends, growing +4.4% YoY. Its performance sits starkly against last year’s 12 month average (Jan17 – Dec17) of -3.0% YoY and January 2017’s YoY growth figure of -8.5%. Similarly, sales growth for the clothing sector was up +16.8% year-on-year, its strongest January growth since 2013. Footwear, Menswear and Womenswear growth were broadly in line with the 5 year average, with year-on-year growth of +13.3%, +10.4% and +6.9% respectively.
This solid start to the year was secured in spite of a dip in the overall market conversion rate to +4.3% from +4.5% last year, continuing the decreasing trend as customers browse more before purchasing. Sales via smartphones are also increasing at a lower rate than last year, at +39.3% YoY in January, while growth through tablets suffered a decrease in YoY growth of -10.0%.
Multi-channel comes out on top
Bhavesh Unadkat, principal consultant in retail customer engagement, Capgemini: “The pessimist will argue this performance was delivered through overstocks from peak and heavy discounting in January. I think it is a mixture of the two; heavy discounting did continue in January for core electricals, but the rise in products available for exercise and voice assistance like Alexa has helped deliver growth to this category. Multi-channel retailers had a significantly higher transaction value than online proving how customers across certain categories like the human touch and engagement with products and staff before committing to a purchase.”
