• Online sales growth forecast revised to 12% for H2 2009, from original view of
    15%
  • June sales down 1.3% compared to May 2009
  • £22.9 billion spent online in the UK in first half of 2009

New figures from the IMRG Capgemini e-Retail Sales Index show that UK shoppers
spent £22.9 billion online in the first six months of 2009. Online spending has
proven to be more resilient than spending on the high street, with year on year
sales for the month of June rising by 12.3%. However, the Index reveals that there
is a slowing rate of growth as sales in June fell by 1.3% compared to May. As
a result, IMRG Capgemini’s forecasts for online retail growth have been revised
down from 15% to 12% for the second half of 2009.

Although the predicted slower rate of growth in the second half of 2009 is in
line with the longer term historical trend, this should not mask the fact that
online continues to be the driver of growth in the retail sector. For only one
month in the first half of 2009 has there been positive year on year growth in
high street sales – compared to an average of 14% year on year growth in the IMRG
Capgemini E-Retail Sales Index.

In addition, the Electricals and the Clothing & Footwear sectors have performed
consistently ahead of the Index during the last six months.

Cash strapped shoppers browse before buying

The Index displays evidence of consumers “windows shopping” with the average Conversion
Rate, which measures the number of purchases per visit, declining for e-retailers
from 7-8% in 2007, to 5-6% in 2008 and now to 4-5% in H1 2009.

Mike Petevinos, Head of Consulting for Retail for Capgemini UK, said:

“The online sales results for the first half of 2009 show a slight slowing of
growth, as the recession weakens consumer spending on the web. However, growth
still looks set to continue for the rest of 2009 with our predictions being at
around 12%.

With online continuing to see growth in sales, the key concern for retailers
should be how well set up are they to exploit this. Our latest results show that
online Conversion Rates have been in steady decline from 7-8% in 2007 to 4-5%
in H1 2009. Greater levels of competition and an increased propensity of consumers
to research before they buy will put pressure on conversion. However, this level
of decline highlights a clear opportunity for retailers to improve customer experience
through their online stores in order to capture their purchases.”

Tina Spooner, Director of Information at IMRG comments:

“Price continues to be a major factor for consumers when shopping online, with
recent research suggesting that 90% of UK households are adopting more prudent
buying strategies to cope during the recession. It is clear there will be challenges
ahead in the coming months for e-retailers as they prepare for the lucrative festive
season.

Despite the fact the Index “bounced” back in June and online sales continue to
prove resilient to market forces, retailers must ensure that they optimise each
sale and continue to invest in web site improvements to take maximum advantage
from the upturn when it arrives.”

Sector

% Change Month on Month

% Change Year on Year

Total Market

-1%

12%

Beers, Wines and Spirits

14%

-7%

Clothing, Footwear and Accessories

-1%

22%

 – Accessories

-5%

63%

 – Footwear

10%

25%

Electricals

-9%

16%

Gifts

14%

3%

Health and Beauty

3%

31%

Lingerie

-10%

-14%

Sector Winners and Losers

Sales for clothing online have consistently performed ahead of the market over
recent months – with shoppers spending £2.1 billion online in the first half of
2009. Capgemini IMRG’s analysis finds that the standout performance of this sector
is due to the advanced range of products on offer, improved visuals, more reliable,
cost effective returns policies and a stronger link between high street and online
offers. Over the history of the Index, clothing has been the flagship sector,
inspiring other sectors to take its lead.

The electrical sector has also seen marked success – sustaining between 16% and
22% year on year growth. This strong performance is due to more mature retail
offerings such as ‘click and collect’ and the increased number of retailers, particularly
the large supermarkets and department stores, using online as they diversify their
ranges into the electrical sector.

The Index shows that online sales for alcohol and lingerie contracted over the
first half of 2009. Whilst month on month Index values show a general small increase,
year on year sales have been down in the months of March, May and June for the
Beers, Wines and Spirits sector and down in each month of 2009 for the Lingerie
sector.

SECTOR SPLITS FROM THE IMRG CAPGEMINI E-RETAIL SALES INDEX FOR H1 2008

Sector splits from the IMRG Capgemini e-Retail Sales Index for H1 2008

Notes to Editors

About IMRG

IMRG (Interactive Media In Retail Group) is the industry body 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 have committed 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 co-operative power of its members.

About Capgemini

Capgemini, one of the world’s foremost providers of consulting, technology and
outsourcing services, enables its clients to transform and perform through technologies.
Capgemini provides its clients with insights and capabilities that boost their
freedom to achieve superior results through a unique way of working, the Collaborative
Business Experience. The Group relies on its global delivery model called Rightshore®,
which aims to get the right balance of the best talent from multiple locations,
working as one team to create and deliver the optimum solution for clients. Present
in more than 30 countries, Capgemini reported 2008 global revenues of EUR 8.7
billion and employs over 92,000 people worldwide.

More information is available at www.capgemini.com.

About the ‘IMRG Capgemini e-Retail Sales Index’

The IMRG Capgemini Index 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.

Over one hundred e-retailers regularly contribute data to the IMRG Capgemini
Index, including Airport Parking & Hotels Ltd, Adili.com, Arcadia Group (Burton,
Top Man, Top Shop, Dorothy Perkins, Evans, Wallis, Miss Selfridge), ASOS.com,
Beautique.com, BeCheeky.com, Binends.com, Black Essentials, Blacks, Boden.co.uk,
Boohoo.com, Boots Direct, Brora, Buyagift.com, Carphone Warehouse, Charles Tyrwhitt,
Clarks, Cloggs, Comet, Co-operative Travel, Crocus.co.uk, Dabs.com, Damart, Daxon,
Debenhams, Dobbies, e-flowersUK.co.uk, Ethical Superstore, Figleaves.com, Firebox,
First Choice, Freemans Grattan Holdings, Furniture123, Game.net, Gameplay.com,
Getting Personal.co.uk, GreatValueJewellery.com, Greenfingers.com, Home &
Cook, Interflora, JD Sports, J D Williams, Jack Wills, Jason Shankey, John Lewis
Partnership, Ladderstore.com, La Magia, La Redoute, lastminute.com, Lighting-Direct,
LK Bennett, Lookfantastic.com, M and M Direct, Made in Sheffield, Marks &
Spencer, Millets, Monster Travel, Musto, Naked Wines, New Look, Next, Peacocks,
Perfect Handbags, PetPlanet.co.uk, PIXmania, Prezzybox.com, QED-UK, QVC, R C Roland,
Redcats UK, Redfoot Revolution, Retro36, Richer Sounds, Rubber Sole, Scales Express,
Shoe-Shop.com, Shop Direct Home Shopping, Schuh, Serenata Flowers, Shudoo, Slurp.co.uk,
SockShop, Sunshine.co.uk, Tesco.com Wine, Tesco Electrical, The Fragrance Shop,
The Health Supermarket, The Jewellery Channel, The Natural Store, TUI UK, Turton
Wines, Vertbaudet, Vie at Home, Waitrose, Wallace Sacks & Wilkinson Hardware.

Quotes from retailers:

Cameron McLean, PayPal’s General Manager for UK merchant services, said:

“The findings of the IMRG Capgemini Index mirror PayPal’s recent UK Online Retail
Report which reveals that the recession is driving more and more people online
in search of bargains. In fact the recession has given rise to a new breed of
‘considered consumers’ who use the internet to research products and shop around
before buying them.

Nearly four in ten online shoppers in Britain now believe it’s easier for them
to budget by purchasing items online rather than the high street, while almost
half believe their money goes further online. Meanwhile seven in ten consumers
say they gather as much information as possible before committing to a purchase,
and 62 per cent of online shoppers believe that the best deals are only available
online. We believe these ‘considered consumers’ are the driving force beyond the
year on year growth in online sales.”

Alison Wade, Head of Marketing at Buyagift.com, said: “The Father’s Day gifting period proved to be very successful for Buyagift.com
in 2009, as we saw a 16% growth in turnover and a 14% increase in orders over
our main site and all reseller sites compared to 2008. This can be attributed
to our buying team having sourced some sensational special offers along with the
marketing department’s implementation of fruitful targeted promotional and email
campaigns.

Encouragingly Buyagift.com continues to exceed its yearly projections and the
outlook for the remainder of 2009 looks very promising indeed.”

Press Contacts:

Melissa Au

020 7025 6417

(Melissa.au@redconsultancy.com)

Flora Hancox

020 7025 6576

(flora.hancox@redconsultancy.com)