Christmas spending kicks off with return to double digit growth

The latest figures from the IMRG Capgemini e-Retail Sales Index have revealed online sales are back on track following a disappointing September, recording annual growth of 14% in October. The Index grew 7% month-on-month, which is the highest level of growth between September and October for four years. Excluding Travel, the UK online retail sector grew 16% YoY, resulting in year-to-date growth of 17%, as per IMRG and Capgemini’s 2014 growth forecast. An estimated £8.8 billion was spent online, the highest market value since December 2013 and a further indication that the 2014 Christmas shopping period has started.
 
This performance was mirrored on mobile, with sales made on smartphones and tablet devices in October, recording 43% annual growth and an 11% increase on September. 
 
The growth of the Index was boosted by a number of key sectors, but it was the solid performance recorded by Clothing which made the most impact. After its lowest ever annual growth in September (0.3%), sales were up 13.5% year-on-year, with the Accessories sub-sector reaching an impressive 63%. Lingerie recorded a similar performance, with a 40% jump on the same period last year.  
 
October revealed a growing disparity between the Multichannel retailers, those with both a physical and online presence, and their online only counterparts. Whilst Multichannel recorded a solid 18% year-on-year growth, the pureplay merchants saw more conservative growth of 8%.
 
As Alex Smith-Bingham (right), Head of Digital, Consumer Products and Retail, at Capgemini, commented: “Multi-channel retailers have been shifting their investments into digital strategies over the last few years, including sophisticated CRM platforms. This has enabled them to provide their customers with a joined up and integrated offering across all of their channels, something which is clearly having a positive influence on sales. As we fast approach the busy Christmas period, it will be interesting to see whether the online only retailers, which are typically able to compete in terms of cost, will be able to close this gap.”
 
Tina Spooner, Chief Information Officer at IMRG comments: “The welcome return to double-digit growth last month follows the poor September results, when the online retail industry was adversely affected by the unseasonably mild autumn temperatures. Excluding the Travel sector, e-retail sales growth is in line with our growth forecast for 2014 at 17% year-to-date and we expect this solid performance to continue for the remainder of the year.
 
“Despite the fact we appear to be seeing a levelling off in consumer confidence, a number of factors indicate that the online retail industry is likely to see a strong festive trading period. E-retailers appear to be more confident in their growth predictions for the fourth quarter, shoppers and spending more per online transaction than last year and our latest research reveals almost half of consumers will order gifts online less than a week before Christmas Day.”
 
Other sectors that performed well in October, include Electricals and Beer, Wine & Spirits, which recorded a year-on-year increase of 17% and 19% respectively. Within the Home and Garden sector, sales of garden products saw an impressive 65% annual growth.
 
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