- September e-Retail sales up 15% over September 2010; up 6% month-on-month
- £5.5bn spent online; £47bn spent online in 2011 to date
- Revised Index growth forecast for 2011: 16% increase on 2010, down from 18%
- Travel sector records lowest quarterly growth since January 2009
The latest figures from the IMRG Capgemini e-Retail Sales Index have revealed a solid performance in the online sales market for September, with the Index climbing 15% year-on-year (YOY) and equating to £5.5bn spent online. If the travel sector is excluded, the Index grew at 20% YOY. The strength of these results is highlighted even further when compared with the UK high-street, which according to the latest British Retail Consortium sales monitor, grew just 0.3 per cent on last year in terms of value on a like-for-like basis.
Despite a good performance last month, IMRG and Capgemini have reviewed their original prediction of 18% annual growth for 2011, and downgraded it to 16% – equating to a 12-14% increase for the fourth quarter. Although this is still strong, it does show that the rate of growth is slowing down; total growth in 2010 reached 18%.
The sectors that have performed particularly well during September include clothing, home and garden, and alcohol – as ‘small-ticket’ items continue to sell well. Clothing jumped 21% YOY, alcohol 16% YOY, and for the second month in a row, home and garden saw a huge YOY growth of 40%. ‘Big-ticket’ items however suffered, seeing falls for electricals (9% YOY) and travel, which saw a growth of just 4% YOY and a decline of -17% month-on-month (MOM).
Chris Webster, head of retail consulting and technology at Capgemini says: “Reviewing the results in September, at the end of the third quarter, provides us with a good opportunity to assess how the economic turbulence is affecting the shopping habits of British consumers in 2011. It appears that rather than cutting back entirely, we have been more conscientious in our purchases – faced with uncertainty, shoppers are prepared to cut back on luxuries, but not from shopping altogether. Smaller items, such as clothing and items for the home, are considered rewards for our belt tightening, or just more sensible purchases.”
The quarterly results show similar disparity between the ‘low-ticket’ and ‘big-ticket’ items and reveal some interesting trends. Clothing sales have remained consistently strong, reporting growth of 27% YOY in Q1, 29% in Q2 and 23% in Q4. Sales in lingerie have also seen steady quarterly growth this year; 17% YOY in Q1, 28% YOY in Q2 and 29% YOY in Q3. In contrast, the more expensive sectors have been suffering, such as electricals, which has slowed dramatically in the last two quarters, from 18% YOY in Q1, to 8% YOY Q2 and just 2% YOY in Q3. The travel sector has suffered the most thus far in 2011, with Q3 sales up just 2% YOY, the lowest quarterly growth since January 2009.
David J Smith, Chief Marketing & Communications Officer at IMRG, comments: “While consumer confidence in the online market was high in H1 of 2011, with the Index recording growth of 19% on H1 of 2010, there has been a slight dip in terms of the growth levels. We are now forecasting a 16% rise for the market for 2011 as a whole, revised down from our 18% forecast at the beginning of the year, which would equate to around 12-14% for Q4. This will still be an impressive performance, as it is off the back of a very strong Q4 in 2010.
“The tough times for the travel sector are showing little sign of improving any time soon, with consumers focusing on home improvements rather than going on holiday. This is borne out by the strong yearly growth in the home and garden sector, the second consecutive month that it has recorded a rise of 40%. It is clear that both the stagnation in the housing market and the continuing uncertainty over the economic recovery are influencing consumer behaviour in the online market.”
Russ Carroll, UK Managing Director of Shopping.com, comments:
“Home appliances such as kettles, heaters and irons showed strong growth in September, a sign that people were starting to prepare for winter despite the unexpectedly warm weather. While clothing once again showed very strong year on year growth, confirming that buying clothes online has well and truly arrived.”
Jonathon Brown, Head of Online Selling, John Lewis,says:
“September was another strong month for John Lewis online delivering growth of over 25% across categories. Although we saw transition from summer to autumn, the weather missed this point and especially as we got to the end of the month the Indian summer inevitably impacted our growth. However it was great to see that fashion, an area most affected by seasonal changes, still delivered over 50% growth on last year.
“Home had a good month delivering over 25% year on year growth with notable outperformances in textiles, carpets and furniture, with customers enjoying both our core Value ranges as well as new designer ranges.
“Finally, in electricals and consumer technology we saw strong performances across the categories, especially in computing with iPads and desktops selling strongly. Streaming and headphones also delivered outstanding sales within audio. So now we are into autumn it’s all to play for as we drive towards our Christmas peak and given the excellent assortment we have online there are many reasons to be positive about the rest of the year.”
Chris Simpson, Chief Marketing Officer, at Kelkoo, comments:
“With summer sun stretching into Autumn alongside reports that homeowners are shying away from moving, online retailers have been able to reap the rewards in the Home & Garden sector, which has seen a 40% increase year on year. Alcohol sales have also benefited from the warm weather as people catered for BBQs and entertaining at home rather than going out. When it comes to clothing, although the unexpected hot spell at the beginning of October is likely to have temporarily affected Autumn clothing sales for next month’s index, overall the results point to a positive outlook for the rest of the year.”
Notes to Editors
IMRG (Interactive Media in Retail Group) is the industry association for global e-retail. Formed in 1990, IMRG is setting and maintaining pragmatic and robust e-retail standards to enable fast-track industry growth, and facilitates its community of members with practical help, information, tools, guidance and networking. Consumers can be confident when dealing with IMRG Members because all interact in an environment where they are encouraged to operate using methods that are Honest, Decent, Legal, Truthful and Fair, and have undertaken to not bring the industry into disrepute. The strength of IMRG is the collective and cooperative power of its members. For more information please visit http://www.imrg.org/ or email firstname.lastname@example.org
With around 115,000 people in 40 countries, Capgemini is one of the world’s foremost providers of consulting, technology and outsourcing services. The Group reported 2010 global revenues of EUR 8.7 billion. Together with its clients, Capgemini creates and delivers business and technology solutions that fit their needs and drive the results they want. A deeply multicultural organisation, Capgemini has developed its own way of working, the Collaborative Business ExperienceTM, and draws on Rightshore ®, its worldwide delivery model.
Learn more about us at www.capgemini.com.
Rightshore® is a trademark belonging to Capgemini
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. These sales are predominantly internet-based today, but the Index remains ready to record e-retail sales conducted via whatever interactive channels the market may embrace in the future.
Around one hundred e-retailers now regularly contribute data to the IMRG Capgemini Index, including Airport Parking & Hotels Ltd, Amara, Arcadia Group (Burton, Top Man, Top Shop, Dorothy Perkins, Evans, Wallis, Miss Selfridge), Ask Direct, ASOS.com, Bank, Berry Bros & Rudd, Binends.com, Blacks, Boden.co.uk, Boohoo.com, Boots Direct, Brandosa.co.uk, Brora, Buyagift.com, BuyItDirect.co.uk, Carphone Warehouse, Charles Tyrwhitt, Clarks, Cloggs, Co-operative Travel, Crocus.co.uk, Dabs.com, Damart, Debenhams, Ethical Superstore, Figleaves.com, Firebox, First Choice, Freemans Grattan Holdings, Furniture123, Game, Gameplay, Gamestation, Getting Personal.co.uk, Greenfingers.com, Home & Cook, House of Fraser, JD Sports, J D Williams, John Lewis Partnership, Ladderstore.com, Lastminute.com, LK Bennett, Lookfantastic.com, Lyco Direct, M and M Direct, Marks & Spencer, Matalan, Millets, My Tuxedo, Naked Wines, NaturalCollection.com, New Look, Next, Peacocks, Perfect Handbags, PetPlanet.co.uk, Philip Kingsley, PIXmania, Prezzybox.com, QVC, Redfoot Revolution, Richer Sounds, Sainsbury’s, Scales Express, Schuh, Scott, Shoe-Shop.com, Shop Direct Home Shopping (Additions, Great Universal, Kays, Littlewoods, Empire, Woolworths,Very, Isme), Serenata Flowers, Size, Sofa and Home, Sunshine.co.uk, Sun-Togs, Tesco.com, The Fragrance Shop, The Health Supermarket, The Natural Store, TUI UK, Turton Wines, Waitrose, Warehouse, Wilkinson Hardware & Wynsors World of Shoes.