Figures from the IMRG Capgemini e-Retail Sales Index reveal that online retail sales grew by 20% year-on-year in June – the highest recorded growth in two years – adding to other recent evidence of economic recovery in the UK. The figures further found monthly growth of 2.4% on May 2013, the first time the Index has recorded a rise between May and June in five years.

The Index reveals a solid second quarter of the year, with online sales up 17% on average on the same period in 2012, exceeding earlier predictions of 12%. However, consumers remain under pressure as inflation outstrips wage growth. The average basket value (excluding travel) in June stood at £79, down 9% compared to £87 in June 2012, as shoppers took advantage of seasonal promotions online – boosting online sales while reducing average basket value.

In terms of sectors performing well, Clothing saw 29% year-on-year growth in June, as the warm weather encouraged shoppers to update their summer wardrobes. Sales for Home and Garden products were also up 35% year-on-year on a like-for-like basis in June, as consumers made improvements to their homes. The good weather spurred Brits to plan their next trip away, with Travel sales up 15% year-on-year and 4% on May 2013.

The M-Commerce Index continued to grow, up 136% year-on-year in June and 8% on May 2013. Conversion rates via mobile devices increased from 1.27% in June 2012 to 2.03% in June 2013, as spending via tablets increases driving conversation rates closer to that of desktops.

Tina Spooner, Chief Information Officer at IMRG: “The online retail market has performed above expectation so far this year, with H1 coming in at 16% average growth against our earlier forecast of 12%. We haven’t seen the rate of year-on-year growth recorded in June for two years, which is around the time confidence in an economic recovery seemed to be heading toward its lowest ebb. The solid growth last month was driven by a strong performance in clothing, perhaps as a result of heavy discounting, however the UK online retail market has performed remarkably consistently throughout 2013 so far, which may signify an overall improvement in consumer confidence that will be welcome news for many.

Chris Webster, Vice President, Head of Retail Consulting and Technology at Capgemini: “The uplift experienced this month will provide retailers with a note of cheer, with the Index recording its biggest year-on-year growth since June 2011 and Q2 being 17% up on Q2 2012. This is in stark contrast to the continued decline in store footfall reported by the BRC over the first half of the year and amplifies the increase of online at the expense of store sales. In addition, Britons remain price-conscious, but have responded well to good deals found online and it’s good to see consumer confidence returning.

“The m-commerce Index remains strong as consumer confidence in purchasing goods and services via smartphones and tablets continue to grow. The findings provide further evidence of the value mobile technologies have brought to the retail sector as consumers continue to shop via this channel.”

Industry View
Oliver Ripley, Mobile Product Manager, eCommera comments: “Mobile commerce continues to power on in 2013. More specifically, the mobile conversion rate has increased from 1.27% in June 2012 to 2.03% in June 2013 which is a very positive signal that mobile commerce is achieving serious traction in the UK market.

Two factors are driving this trend. They are push and pull factors. Firstly, modern retailers are investing more in their mobile commerce storefronts, whether that is browser or app. More effort is being put into user interface, the user journey, the payment experience and so on making it a far more pleasurable experience for customers who are using the mobile services. Secondly, users are becoming more accepting of using mobile devices to complete transactions and this is especially true for the younger, Generation X & Y, consumer types.

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