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IREU Top500 The Customer Report: 2018

IREU Top500 The Customer Report: 2018

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Ecommerce surprises with January sales growth starting the year strongly

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Ecommerce surprises with January sales growth starting the year strongly
Ecommerce surprises with January sales growth starting the year strongly

Online sales have started the year "surprisingly" strongly, according to new figures.

Ecommerce sales grew by 13.9% during the January, according to the latest IMRG Capgemini e-Retail Sales Index. Clothing sales grew by 16.8%, the strongest in January since 2013, while electricals sales were up by 4.4%, higher than the 12 month average of -1.9%.

Sales were 20.5% lower than in December - but that’s the lowest decline between the two months in five years, says the etail trade association.

Bhavesh Unadkat, principal consultant in retail customer engagement at Capgemini , said: “Electricals grew by 4% on the year; the optimist will position this is a good start to 2018 compared to the declining 2017 performance – it’s proven if electricals does well then other categories usually follow. 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. Multichannel 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.”

IMRG believes above average rainfall for January played its part, with footfall at its lowest level for five years. Instead, consumers went online to shop. As a result, the post-Christmas decline in sales between December and January (-20.4%), was less than the five-year average of -24.1%.

The solid start to the year came despite a dip in the overall market conversion rate to +4.3% from +4.5% last year, according to IMRG. That, it said, came as customers browsed more before buying. Sales via smartphones grew at a lower rate than last year, at +39.3% YoY in January, while tablet sales were down by 10%, year-on-year.

Justin Opie, managing director, IMRG , said: “14% growth for January represents a strong start to the year, arguably even surprisingly so. The economic climate remains challenging, with inflation remaining at 3% and an interest rate rise anticipated over the next few months. The impact on retail was very apparent in January, with several very large retailers announcing store closures and job cuts – high street footfall also fell to a five-year low for January. Yet online appeared to benefit from that, with the index recording the lowest month-on-month decrease (-20.5 %) between December and January in five years. It may be that, as we enter 2018, we are seeing signs of an acceleration of the general move over to online, putting pressure on those retailers with large store portfolios to sharpen their focus on rolling out their digital strategy.”

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