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Ecommerce grows by 18.8% in April as retail moves further online: IMRG

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Shoppers are now choosing to buy more online
Shoppers are now choosing to buy more online

UK online sales grew by 18.8%, compared to the same month last year, as the weather warmed up in April and sales moved further online, the latest IMRG figures suggest.

 

The etail trade association says year-on-year ecommerce growth for the month is the highest seen since November 2016, and came despite Easter falling early, in March. It’s ahead of the 17% average in the three months to April, and the 12 month average of 13.1%.

 

“Growth in online retail sales revenue has been markedly higher than expected throughout 2018 so far,” said Andy Mulcahy, strategy and insight director at IMRG. “One reason is likely to be related to a turnaround in economic fortunes - while inflation outstripped wage growth for most of 2017, the gap has closed in recent months and wag growth was actually higher than inflation in March 2018. This means that, one the whole, UK shoppers should be feeling a bit more confident in making purchases. This is reflected in the data we are tracking – if we look at the last six months (July to December) of 2017, online retail sales growth was 12.2%. The first four months has come in at 16.2%.

 

“What has been very apparent is that it is online retail that is benefiting, while the high street is facing a sustained downturn. Up until now, there have been multiple reasons to suspect this split in performance may have been influenced by various external – and therefore temporary – factors; the above average rainfall in January, the snow in February/March, Easter being early this year. The fact that April 2018 is comparing against an April last year that included Easter - with the boost to retail that it typically brings, suggests that t his is not a blip. As shoppers have started to find themselves with a bit more disposable income in 2018 we are possibly witnessing an acceleration in the shift of shopper behaviour over to online. Much of the coverage of the downturn on the high street sees it as a negative development - but actually shoppers are still shopping as much as they did before. It’s not retail that is suffering; it’s just undergoing a digital transition at a far after pace than was previously the case.”

 

The online growth reported by IMRG contrasts with falling footfall reported by the British Retail Consortium earlier this week. It reported a 3.3% drop in visitor numbers to stores, following a March in which footfall fell by 6% – adding up to a drop of -4.8% over the two months, compared to a year ago.

 

The rise came as sales increased in the clothing (+15.6%), garden (+12%) and electricals (20.9%) compared to a year ago. But home sales were down (-15.6%).

 

Conversion rates fell to 4.15% from 4.3% a year earlier. That’s the fifth drop in a row so far this year and, says the IMRG, is likely to reflect the growing proportion of sales made via smartphones, which have lower conversion rates. That said, average basket value were up, by £14 to £117.12 among multichannel retailers, and by £3.50 to £87.16 for pureplay retailers.

 

Bahvesh Unadkat principal consultant in retail customer engagement at Capgemini, said the growth in electricals could be driven by growing consumer confidence, along with a raft of bank holiday offers and the upcoming football World Cup.

 

“Ths links to a bigger picture as consumers are adopting more technology as part of their everyday life; voice-assisted technology is the primary driver of smart technology in the home, wearable technology such as health and fitness devices is increasing in popularity and further innovations in home security and entertainment give a taste of upcoming trends in 2018. While retailers benefit from the sales performances, it also serves as a reminder that as the integration of technology gathers pace for the consumer, it challenges retailers to reflect this in their own customer experiences.”

 

 

 

Image: Fotolia

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