IMRG Capgemini e-Retail Sales Index: Strong e-retail performance in May, but basket value showing decline

Conversion rates soared to 4.9% (excluding travel) in May, up 20% compared to the same month in 2012 and 2011. This coincided with a fall in average basket value, which excluding travel, stood at £77 from January to May 2013, down from £83 and £86 for the same period in 2012 and 2011 respectively. This could be attributed to savvy shoppers searching for bargains online, and once a bargain is found, are more likely to purchase – boosting sales while reducing average basket value.

In terms of individual sectors, clothing saw 16% year-on-year growth in May, as the increase in temperature encouraged consumers to update summer wardrobes. The warmer weather also spurred Brits to splash out on purchases for the house; the Home and Garden sector saw a 41% increase in like-for-like sales last month, compared to the same time last year.

The figures reveal that online-only retailers outperformed their multichannel counterparts. Online retailers saw sales rise by 18% year-on-year in May, while retailers which have both a physical and online presence recorded a 16% rise. This suggests increased confidence among consumers in the internet as a transaction medium, and is a result of the increased adoption of technologies and services (tablets, PayPal) introduced by online retailers.

The M-Commerce Index recorded a year-on-year growth of 148% in May. While this is indeed strong, it is the lowest annual growth since the Index began.

Tina Spooner, Chief Information Officer at IMRG: “Due to the ease with which customers can browse between retail sites in search of the right offer for them, pricing has become more competitive than ever. While the online retail market continues to grow at a faster-than-expected rate, customers are spending less per transaction which impacts on the profit margins for the business. In fact, the average online basket value year-to-date is down over 10% compared with the same period in 2011. This declining trend is not likely to shoot up again quickly, as the expectation of value goes hand-in-hand with shopping online.”

Chris Webster, VP, Head of Retail Consulting and Technology at Capgemini: “The online sales reflect the ongoing economic climate.  Whilst there has been a slight growth in average earnings, it is still running behind the current rate of inflation of 2.4%; as a result Brits have to be savvier shoppers and embrace the savings that can be found online.

“The challenge to the high street is that once shoppers get used to the convenience of online and the ability to make their money go further, this behaviour will continue even as health is restored to the economy.”

Industry View:

Oliver Ripley, Mobile Product Manager, eCommera comments: “The holy grail of mobile digital commerce is a high conversion ratio. A high conversion ratio shows that digital vendors have designed their mobile services in such a way to encourage mobile shopping and repeat purchase. Looking at conversion ratio the first five months of 2012 versus the same period in 2013, the average ratio has increased from 1.4% to 2.16% which shows that more and more investment is going to optimising digital retail services for mobile users. It seems that mobile commerce conversion ratios are now very nearly at parity with desktop commerce conversion ratios.”

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, Addict, Airport Parking & Hotels Ltd, Amara, Arcadia Group (Burton, Top Man, Top Shop, Dorothy Perkins, Evans, Wallis, Miss Selfridge), Ask Direct, ASOS.com, B&Q, Bank, Berry Bros & Rudd,  Binends.com, Blacks, Boden.co.uk, Boohoo.com, Boots Direct, Boutique to You, Brandosa.co.uk, Brora, Buyagift.com, BuyItDirect.co.uk, Carphone Warehouse, Charles Clinkard, Charles Tyrwhitt,  Clarks, Cloggs, Cocosa, Co-operative Travel, Crocus.co.uk, Dabs.com, Damart, Debenhams, Dune, Dunelm Mill, Effortless Skin, Ethical Superstore, Firebox, First Choice, Freemans Grattan Holdings (Freemans, Grattan, Look Again, Kaleidoscope, Curvissa, Swimear365, Witt International UK), Furniture123, Game, 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, M and M Direct, Majestic Wine, Marks & Spencer, Matalan, Millets, Naked Wines, NaturalCollection.com, New Look, Next, Perfect Handbags Perricone MD, PetPlanet.co.uk, Philip Kingsley, PIXmania, Prezzybox.com, Purely Gadgets, QVC, Redfoot Revolution, Richer Sounds, Sainsbury’s, Scales Express, Schuh, Scotlight Direct, Scott, Shoe-Shop.com, Shop Direct Home Shopping (Brand Quarter, Kays, Littlewoods, Very, Isme, Woolworths), Serenata Flowers, Size, Slurp.co.uk, Sofa and Home, Sparkling Strawberry, Sunshine.co.uk, SuperGA, Tesco.com, The Body Shop,  The Mat Factory, The Natural Skincare Co, The Natural Store, The White Company, This is Pulp, ToxicFox, TUI UK, Turton Wines, Waitrose, Warehouse, Wilkinson Hardware & Wynsors World of Shoes.
About IMRG
IMRG (Interactive Media in Retail Group) is the UK’s industry association for 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. The strength of IMRG is the collective and cooperative power of its members. For more information please visit http://www.imrg.org/ or email membership@imrg.org  
About Capgemini
With more than 125,000 people in 44 countries, Capgemini is one of the world’s foremost providers of consulting, technology and outsourcing services. The Group reported 2012 global revenues of EUR 10.3 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.uk.capgemini.com.
Rightshore® is a trademark belonging to Capgemini