UK online retail sales held steady this August, as shopper spending managed a sunny +12.8% growth year-on-year (YoY) – but m-retailing saw its lowest growth rate since 2014.
According to the latest IMRG Capgemini e-Retail Sales Index, growth of m-retail on smartphones and tablets hit just +10% YoY. While smartphone growth still came in at +26.7%, it was the lowest growth since September 2014 – and a significant drop on last August’s +53.6%.
Multichannel m-retail growth only just stayed above water with +1% YoY growth, while online-only m-retail growth was up 15% YoY.
“The main driver of growth in our index over the past few years has been smartphone devices; throughout 2016 sales growth through these devices was typically in the 75-100% range, then in 2017 it gradually slowed down to be in the 40-60% range, then as we’ve entered 2018 it has continued to decline,” says Andy Mulcahy, strategy and insight director, IMRG.
He continues: “This is expected, as very high growth cannot usually be sustained for long periods, but in August three points of note happened. The first was that smartphone sales growth was at its lowest rate since September 2014; August 2018 was also the first time it has fallen below the 30% mark since then. The second was that, looking at mobile devices overall – smartphone and tablets combined – growth was at its lowest ever rate since we started tracking it in 2012. And finally, the weak performance seems to be attributed to the multichannel retailers, who recorded overall mobile device growth of just 1%, while for the online-only retailers it was up 15%.”
This could in part be due to the summer seeing unprecedented shopping levels for things like garden and home, not to mention the sunshine brining people out into the shops, where they could buy in person, rather than having to resort to a phone or getting online.
Also the weather is likely to have stymied all those bored impulsive purchases made by bored consumers stuck indoors watching the Summer rain trickly down the windows. Instead, many were out and about enjoying the weather and not looking at their phones.
This is backed up by further IMRG findings which suggest that garden finally slowed down after enjoying blockbuster growth from this year’s heatwave, coming in at just +2.8% YoY growth, down -43% against July. This sits in stark contrast to the previous 3-month average of +37.5% YoY. Beauty, conversely, had a strong month coming in at +25.3% YoY. Lastly, clothing had a mixed month, coming in at just +5.4 YoY. Curiously, Menswear experienced +18.6% growth versus just +3% for women.
“We were expecting a much bigger downturn in August than we got given the effect of the hot summer and events boosting sales in the previous months,” says Bhavesh Unadkat, principal consultant in retail customer engagement, Capgemini. “The index was down on last month by less than 2%, the lowest decline compared to last four years, and therefore one of best performance we’ve had coming out of July.”
He continues: “The August performance was largely driven by an uplift in the final week during the August bank holiday weekend; where we started to see a change in the weather, potentially driving autumn-wear and new season growth. Basket values in clothing however, were 11% lower than last year, which could be a result of heavier promotional activity as retailers continue to claim share-of-wallet.”
Unadkat concludes: “Categories such as Beers, Wines and Spirits and Electricals had a poorer month, demonstrating underlying revenue is coming more from core and necessity products as a trend rather than luxurious items.”