IMRG Capgemini eRetail Sales Index: Heavy discounting spurs highest online sales growth in 20 months

High discounting by retailers across the board throughout July may have contributed to the strong performance of the Index, with the average basket value of goods purchased online falling from £80.52 in June 2016 to £78.39 a month later*.  This discounting may have been influenced in part by a need to compete with Amazon Prime Day (12 July), with Amazon announcing that customer orders surpassed Prime Day 2015 by more than 60% worldwide.

In a warmer-than-average July** consumers headed online to renew their summer wardrobes. The overall clothing sector grew +22%, while sub-sectors including accessories (+33%), footwear (+24%), lingerie (+31%) and womenswear (+21%) all recorded above average yearly growth. Looking slightly wider, the home sector grew +50% YoY, while the garden sector grew +39%. Indeed, the only sector to decline was beers, wines and spirits, which fell by a marginal -1%.

The Index growth was also, in part, fuelled by a resurgence in sales growth for multichannel retailers, who recorded a growth rate in online sales of +19% – a 13-month high. This was supported by continued strong growth for online-only retailers where sales grew +18% YoY.*

This surprise revival for multichannel retailers follows a sustained period of lower growth compared with their online-only counterparts. Indeed, IMRG and Capgemini reported last month that the gap between the two groups had reached a record-high in June, when growth for the online-only retailers was a full 23 percentage points ahead of the rate for the multichannel retailers, compared with June 2015.

Bhavesh Unadkat, Management Consultant in Retail Customer Engagement Design, Capgemini: “It’s great to see that the Index registered such a strong July performance – the biggest growth since November 2014. Impressive sales from the multichannel retailers saw them drive growth and undoubtedly helped the month’s figures. Indeed, many of these retailers had reactive plans in place to match the discounts offered by Amazon Prime Day, which goes some way to explaining the drop in basket value. These low prices spurred high volume sales which ensured double-digit growth. 

“Finally, the figures were also bolstered by an encouraging economic position which increased consumer confidence, alongside, of course, some great weather.”

Tina Spooner, Chief Information Officer, at IMRG: “The strong performance in July appears to have been driven by the apparel sector, where all the sub-categories outperformed the total online market with growth in excess of +20% year-on-year.  While we typically see average transaction values fall during the summer sale period, the latest Index results suggest multichannel retailers were discounting more heavily last month, with this group recording a -6% fall in average basket values from June, while the online-only merchants saw no change in average customer spend.

“Year-to-date, UK online sales growth is ahead of forecast at +15% year-on-year (forecast was for +11%) but, while we anticipate seeing double-digit growth continue during August due to a weak performance for the same month last year, 2016 is proving to be a tough one to predict – particularly given the referendum result and the fact we have yet to record any significant impact from it in the Index so far, while some other economic indicators have already revealed some degree of impact.”

Doug Gurr, UK Country Manager, Amazon: “We were delighted by the positive response by our customers to Prime Day, as they made it our biggest day of the year so far. Prime Day was a record-breaking success for small businesses selling on Amazon, with more than 30% of UK Prime Day deals from independent Marketplace sellers.  Prime Day has become a major annual summer deals day for customers, offering our millions of Prime members in the UK thousands of deals on everything from Amazon’s best-selling Fire TV Stick to great health, beauty, home, grocery, electronics and fashion products.”

*Excluding travel retailers

**https://www.theguardian.com/uk-news/2016/aug/07/july-rainfall-temperature-sunshine-wind-last-months-weather

-ENDS-

About the ‘IMRG Capgemini e-Retail Sales Index’

The IMRG Capgemini Index, which was started in April 2000, tracks ‘online sales’, which we define as ‘transactions completed fully, including payment, via interactive channels’ from any location, including in-store. 

Over one hundred e-retailers now regularly contribute data to the IMRG Capgemini Index, including

A. Hume Country Clothing, Amara, Appliance House, Arcadia Group (Burton, Top Man, Top Shop, Dorothy Perkins, Evans, Wallis, Miss Selfridge), Ask Direct, ASOS.com, B&Q, Berry Bros & Rudd, Blacks, Boden.co.uk, Boots, Brora, BT Shop, Buyagift.com, Carphone Warehouse, Charles Tyrwhitt, Clarks, Clinkards, Crocus.co.uk, Damart, Debenhams, Deckers, Dunelm Mill, Effortless Skin, Ethical Superstore, Feelunique.com, Firebox, First Choice, Freemans Grattan Holdings (Freemans, Grattan, Look Again, Kaleidoscope, Curvissa, Swimear365, Witt International UK), Get The Label, Greenfingers.com, House of Fraser,  Jack Wills, JD Sports, JD Williams, John Lewis Partnership, Ladderstore.com, Lakeland Furniture, Liz Earle, M and M Direct, Made In Design, Majestic Wine, Marks & Spencer,  Millets, Missguided, Moss Bros, Naked Wines, NaturalCollection.com, New Look, Next, Notonthehighstreet.com, Oasis, PetPlanet.co.uk, PetsPyjamas.com, Pink Boutique, Prezzybox.com, QVC, River Island, Rocket Dog, Scales Express, Schuh, Scotlight Direct, Scott, Screwfix.com, Shoe-Shop.com, Shoetique.co.uk, Shop Direct Home Shopping (Littlewoods, Very, Very Exclusive), Serenata Flowers, Shoetique, Silentnight, Size, Sofa and Home, Sparkling Strawberry, Spirit Boutique, Sunshine.co.uk, Tesco.com, The Body Shop, The Great Gift Company, The White Company, TUI UK, Turton Wines, Universal Music, Waitrose, Within Home, Woods of Shropshire & Wynsors World of Shoes.

About IMRG

For over 20 years, IMRG (Interactive Media in Retail Group) has been the voice of e-retail in the UK. We are a membership community comprising businesses of all sizes – multichannel and pureplay, SME and multinational, and solution providers to industry.

We support our members through a range of activities – including market tracking and insight, benchmarking and best practice sharing. Our indexes provide in-depth intelligence on online sales, mobile sales, delivery trends and over 40 additional KPIs.

Our goal is to ensure our members have the information and resources they need to succeed in rapidly-evolving markets – both domestically and internationally.

www.imrg.org

About Capgemini

With more than 180,000 people in over 40 countries, Capgemini is a global leader in consulting, technology and outsourcing services. The Group reported 2015 global revenues of EUR 11.9 billion. Together with its clients, Capgemini creates and delivers business, technology and digital solutions that fit their needs, enabling them to achieve innovation and competitiveness. A deeply multicultural organization, Capgemini has developed its own way of working, the Collaborative Business Experience^TM, and draws on Rightshore^®, its worldwide delivery model.

Learn more about us at www.capgemini.com.

Rightshore^® is a trademark belonging to Capgemini