• £5.46 billion spent online in December
  • Sales up 17% compared to December 2009
  • Peak week for Christmas shopping delayed
  • Online retail market bucked economic trends – grew by 14% in 2009
  • IMRG and Capgemini predict 13% growth for online retail in 2010

New figures from the IMRG Capgemini e-Retail Sales Index show that UK shoppers spent £5.46 billion online in December – an equivalent
of
£88.93 for every person in the UK – 17% up on December 2008. Sales rose by 3.8%
compared to November 2009, demonstrating typical growth for the month of December.

The peak week for online Christmas shopping was the second week in December.
This was one week later than in 2008, as a combination of November postal strikes;
shoppers holding out for bargains; increased confidence in delivery services;
and Christmas falling on a Friday delayed the annual spending spree

2009 – a year of sustained growth for e-retail

Year-on-year growth in the Index in 2009 was at average of 14%. In September
of 2009, the growth rate of 7.6% was the lowest year-on-year growth rate in the
history of the Index, perhaps attributed to warm weather and postal strikes taking
place during this particular month.

Clothing mirrored the overall market throughout the year – this sector has driven
the overall Index in 2009. Accessories, gifts, health and electricals performed
less well throughout the year but peaked in November and December 2009.

Sector splits – December 2009

Compared to December 2008, there was strong year-on-year growth in all sectors
tracked in the Index. Sales of accessories, gifts, electricals, and health and
beauty products saw particularly marked growth online compared to last Christmas.

Consumers looking to stock up on alcohol for Christmas celebrations turned to
the internet for the best bargains, spending 25% more than in November. Although
clothing saw low growth compared to November, shoppers spent 18% more compared
to December 2008.

Sector

% Change Nov 09 – Dec 09

% Change Dec 08 – Dec 09

Beers, Wines and Spirits

25%

21%

Clothing, Footwear and Accessories

3%

18%

 – Accessories

17%

101%

 – Footwear

-2%

37%

Electricals

17%

39%

Gifts

17%

70%

Health and Beauty

10%

39%

Lingerie

1%

15%

Mike Petevinos, Head of Consulting for Retail for Capgemini UK, said:
Once again, shoppers have turned to the internet to do their Christmas shopping,
with 17% growth year on year this December. An interesting shift during this festive
period is the strength of the month on month performance for multi-channel retailers
(up 13%) versus their pure-play competitors (down 8%). This shows both the high
value consumers place on a multi channel proposition, particularly when it comes
to gift returns, and the trust advantage our high street brands have if they can
get their online proposition right.

“A key trend highlighted by our index analysis is the 25% drop in conversion
rates from 2008 to 2009. This is a clear reflection of the increased traffic using
the internet as a source of product information and recreation, accelerated by
the increase in retail content on social network sites such as facebook. This
highlights the significant opportunity on the table for retailers to enhance their
online customer experience.”

James Roper, Chief Executive of IMRG comments:

“The latest Index figures prove yet again that online shopping thrives on adversity.  The sector managed to deliver strong double-digit growth in 2009 despite the
economy being in recession, aggressive high street competition, extreme weather
and even postal strikes in the run-up to Christmas. 

“2010 looks set to produce another year of strong results for e-retail, with
demand expected to remain high as consumers habitually look online for best buys,
and a pipeline of significant improvements emerge, including wider product range
availability, even better websites and a greater choice of convenient and more
reliable delivery options.”

The growth levels for multichannel retailers and online only retailers diverged
in December for the first time last year. The Index for online only retailers
fell by 7.6%, whereas the Index for multichannel retailers rose by 13% month on
month. This can be attributed to multichannel retailers (such as large department
stores) offering guaranteed delivery for Christmas later in the month.

Although following a downward trend throughout 2009, the average conversion rate
for e-retailers rose slightly in December, with almost one in 20 visits to websites
being translated into actual purchases. This was higher for online only retailers,
who managed to convert an average of one in sixteen visits in December.

Jonathon Brown, Head of Online Selling, John Lewis Direct said:

“Johnlewis.com continued its outstanding performance from November into December
with record breaking weeks throughout the month.

“This assortment growth along with record numbers of visitors coming to the site
in December delivered a 20% year-on-year increase in sales on the site. There
were notable performances across johnlewis.com, however, a few to highlight were
toys and sports as customers shopped for Christmas online as well as got ready
for the January resolutions to get fit.

“It is worth noting that the launch of Clearance online (from Christmas Eve)
saw johnlewis.com take over one order a minute in the first hour and continued
to see strong sales throughout the festive period – we recorded our highest ever
traffic day on the Boxing Day.”

For further information please contact:

Notes to Editors

Quotes from retailers:

Tony Solomons, Retail Director at Waitrose, said:
This Christmas, sales via our online shopping service, WaitroseDeliver, were
up by a fantastic 95% on last year and were a key growth driver for the business.
In Spring last year we became the first and only UK food retailer to abolish the
delivery charge on all our online grocery orders – helping customers save 5%-10%
on their online shopping bills. Customers have also been drawn to use the service
as they can enjoy all of the price promotions available in store, plus the quality
of our full range and the value of essential Waitrose.

 Giles Harridge, co-founder of GettingPersonal.co.uk, says:

 “GettingPersonal.uk had the most successful December on record: sales were up
over 65 per cent on December 2008.  We saw an increased demand for personalised gifts such as 2010 Calendars, Christmas
Cards and Football Books.  Non-personalised items such as Microwavable Cozy Boots, Slankets and novelty
festive products also flew off the shelves as relatives looked for warm winter
gifts and stocking fillers in the run up to Christmas Day.

“The increase in sales is the culmination of several things, but in essence it’s
our unique product offering and excellent service that counts.  On many lines we were even able to offer a premium Christmas delivery courier
service on orders placed up to lunchtime on 23rd December, so we were busy right
up to the last minute.  December brought a tremendous amount of success for us – not only did we see
unprecedented sales figures but we finished 12th in the Sunday Times Virgin Fast
Track 100 league table, a reflection of how we are really progressing as a business.”  

Commenting on the latest IMRG Capgemini e-Retail Sales Index, Cameron McLean, PayPal’s General Manager for UK merchant services, said: “Whilst people still very much rely on trusted high street brands, the convenience
of online shopping is a big draw. These latest figures and PayPal’s own research
show that the real winners in 2010 and beyond will be those retailers who successfully
integrate both their on and offline offerings. PayPal research shows 62% of online
shoppers say they would like their favourite retailers to do more to integrate
their online and offline services. But multi channel retailers also need to work
hard to maintain this loyalty; PayPal research shows that shoppers no longer differentiate
between retailers’ on and offline services with one in five (22%) online shoppers
saying they have been put off making a future in-store purchase from a brand having
had a bad experience online.”

Mark Newton-Jones, Chief Executive of Shop Direct Group, said: “In December we continued to see a rise in customer demand for online
transactions. 65% of sales were generated online during the six weeks up to 1st
January and we had a number of days where 85% of sales were taken online.

“We found that last year customers concentrated their shopping into two weeks
but this year, we have seen four equally large trading weeks; the last two weeks
of November and the first two weeks of December.  We believe that the ease of shopping online allows customers to manage their
shopping time more effectively, planning earlier and shopping later. Whilst the
recent unprecedented weather conditions have made trading extremely challenging,
we have been able to work with our delivery company to ensure that any disruption
was minimised.”

Julian Granville, Managing Director of Boden, said: “Trading in December was surprisingly good but there is no marked trend other
than a continued shift from offline to online buying”.

Christian Robinson, Managing Director of Firebox, comments:

“December was a record breaking month at Firebox.com with sales up 31% on 2008.
We saw our most profitable Christmas in Firebox’s eleven year history and order
volumes were sustained from our peak on December 7th (when we made a record-breaking
number of orders in one day) right up until December 23rd, which is unprecedented.

“The snowfall just before Christmas had both positive and negative effects –
we certainly saw an uptake in orders as conditions worsened and consumers opted
for online shopping over the high street. The negative effects were minimal –
our warehouse team continued to function as usual but we were aware that couriers
were having problems in certain parts of the country so we brought forward our
last order date by a day to ensure that orders would be delivered in time. ”

Julie Ireland, Director of Perfect Handbags, said:

“November sales were disappointing, which we attributed to the threat of and
actual postal strikes (even though we were unaffected because we don’t use the
Royal Mail).  We were therefore very nervous about December which started very slowly but
by 5th December our sales took off, more than 3 times our sales for the same period
last year.  Strong sales continued to 18th December and then slowed (as is normal) for the
last few posting days before Christmas.  

“Sales were strong in the last week of 2009 as we launched our sale, but the
New Year started slowly – it’s difficult at this stage to be sure exactly why
– January can vary hugely year on year – but we are guessing that online customers
have assumed that deliveries will be delayed because of the weather, even though
our deliveries have not been delayed so far.   Sales suddenly increased on 7th January and stayed strong since then.  If the trend continues we predict that sales for January 2010 will be 22% up
on 2009, a promising start to the new decade.”

Zak Edwards, MD of Prezzybox.com, comments:

“Despite all of the economic doom and gloom in 2009, Prezzybox finished the year
extremely strongly, marking a growth of 57% for the month of December compared
to the same period in 2008. Contributing factors to this impressive growth include
a proactive marketing campaign whereby £5 million worth of gift vouchers were
given away as well as an aggressive product pricing policy.

“Since Christmas Day, our sales have trebled on the same period 2008/2009. I
attribute this to a number of factors, including the adverse weather conditions.
Our winter sale launched on the 23rd December and the online shopper/retailer
is becoming more savvy to ‘lure’ of special offers, hence an increase in traffic
and conversion rate. Prezzybox also took a record number of orders in December
and as a whole offered a good service, consequently our repeat customer base has
increased.

Dobbies.com Head of eCommerce, Joel Rendle, said: “We’ve had a record Christmas
at www.dobbies.com with December sales nearly double that of last year. It’s clear
that customers were shopping around for a real bargain to ensure that 2009 delivered
a great Christmas for their friends and family.”

Alison Wade, Head of Marketing at Buyagift.com, said:

“Buyagift.com has posted growth of more than 29% at the end of 2009 – its 10th
year of trading. With visits to the site up by around 28% and orders up by 30%,
the growth targets set for 2009 comfortably exceeded expectation.

 

“With the weather playing a major role in the public’s shopping choices in December,
the North London based company worked around the clock to make sure their customers
received their orders on time. With a 39% increase in revenue compared to 2008,
and over 50% growth in the of orders received compared to this time the previous
year, the value for money offered and the high standards of customer service paid
dividends during this key gifting period.”

Ulric Jerome, Director, PIXmania.com said:

“The Christmas period was very strong for PIXmania, with ecommerce sales up 15%
compared to the previous year.  December 31st proved to be the busiest day with another surge in sales, as some
consumers rushed to beat the VAT increase.  High demand was also encouraged by the launch of PIXmania’s sale on the 26th
December, during which discounts of over 50% were available across thousands of
products. TV’s, computers digital cameras and MDA products have proved the most
popular.”

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 – and through a global delivery model called Rightshore®,
which aims to offer the right resources in the right location at competitive cost.
Present in 36 countries, Capgemini reported 2007 global revenues of EUR 8.7 billion
and employs over 83,000 people worldwide.

More information is available at www.uk.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 to the IMRG Capgemini Index,
including Airport Parking & Hotels Ltd, Amara, Arcadia Group (Burton, Top
Man, Top Shop, Dorothy Perkins, Evans, Wallis, Miss Selfridge), Ascension (formerly
Adili.com), ASOS.com, Beautique.com, BeCheeky.com, Binends.com, Black Essentials,
Blacks, Boden.co.uk, Boohoo.com, Boots Direct, Brora, Buyagift.com, BuyItDirect.co.uk,
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, Faith Shoes,
Figleaves.com, Firebox, First Choice, Freemans Grattan Holdings, Furniture123,
Game, Gameplay, Gamestation, Getting Personal.co.uk, GreatValueJewellery.com,
Greenfingers.com, Holiday Extras, Home & Cook, House of Fraser, 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, NaturalCollection.com, New Look, Next, Peacocks, Perfect Handbags,
PetPlanet.co.uk, PIXmania, Prezzybox.com, QED-UK, QVC, R C Roland, Redcats UK,
Redfoot Revolution, Richer Sounds, Rubber Sole, Sainsbury’s, Scales Express, Shoe-Shop.com,
Shop Direct Home Shopping, Schuh, Serenata Flowers, Shudoo, Slurp.co.uk, SockShop,
Sofa and Home, Sunshine.co.uk, Tesco.com, Tesco Electrical, The Fragrance Shop,
The Health Supermarket, The Natural Store, TUI UK, Turton Wines, Vertbaudet, Vie
at Home, Waitrose, Wallace Sacks & Wilkinson Hardware.

1 Based on overall spend from the IMRG Capgemini e-Retail Sales Index’ divided
by UK population according to ONS: http://www.statistics.gov.uk/cci/nugget. asp?ID=6