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March online sales results suggest customer behaviour is becoming increasingly unpredictable

12 Apr 2022

Online retail sales growth came in at -25.5% Year-on-Year (YoY) in March, a slight rise on February’s -26.5%
At a glance, this growth still seems quite low – falling below the 3-month (-24.4%), 6-month (-17.2%) and 12-month (-10.9%) averages – but it is being compared to a spike of +57% in 2021
Month-on-Month (MoM) growth was also up to +5%, which is typical for this time of year
Average basket volume (ABV) has increased by £15, as inflation, and increasing prices continue to affect the market

                <p><strong>LONDON UK – 12<sup>th</sup> April 2022:</strong> Online retail sales fell -25.5% Year-on-Year (YoY) last month, which is to be expected when compared to March 2021’s high growth of +57%. That is according to the latest IMRG Capgemini Online Retail Index, which tracks the online sales performance of over 200 retailers. Looking at the Month-on-Month (MoM) picture spending patterns appeared in line with expectations for this time of year, although this does belie a general sense amongst retailers that customer behaviour is becoming increasingly unpredictable – with some weeks weaker than expected and others stronger. Without the anomalous pandemic growth for comparison next month’s data will reveal a clearer indication of what growth is really looking like.</p>

Month-on-Month growth has crept back into the positive – coming in at +5% versus the previous month’s -7.7%. This is exactly where it was in 2019 before the pandemic disrupted the metric. Meanwhile the average basket volume (ABV) has once again climbed by £15, now standing at £136

At a category level, womenswear and menswear continue to exhibit positive growth (+20% and +14% respectively), whilst the rest of the categories show poor YoY changes – ranging from -2% in footwear to -44% in homeware and decorations.

Andy Mulcahy, strategy and insight director, IMRG: “The Index shows that online retail maintained a big dip (-25.5%) during March, but that is against huge growth last year so is not necessarily indicative of poor performance. However, many retailers are reporting volatile traffic and sales spikes to us, with very little consistency in when one retailer does well and another badly. Retailers also report having to employ strategies such as discounts and offers to stop sales dropping, so while the index isn’t tracking major fluctuations, behind the scenes things are more frenetic than they seem; there is consistency in the inconsistency.

“On another note, Black Friday 2022 is on 25 November, which we recently found out is the same day that England play USA in the World Cup. Retail has never faced the distraction of the biggest global sports event before in the lead-up to Christmas, especially on the most significant ecommerce day of the year, but that could be a big factor disrupting it.”

Lucy Gibbs, senior manager, retail lead for analytics & AI, Capgemini:

“Despite the continued sales dip, online appears to be maintaining an increased share of the market two years since the pandemic began. However, there are strong headwinds facing the sector, with cost-of-living pressures and record high fuel prices affecting consumer confidence as well as increasing operational and supply costs for retailers. While retailers are doing what they can to mitigate against price increases, we have already started to see the impact on certain products, such as electricals and the overall average value of a basket continues to trend up, 12% vs February.  Order volume has also dropped down to a new low of -42%, potentially indicating that purchases are already becoming more considered. Weathering this storm will require tuning in to consumer reactions, where value for money will be at the forefront of decision making “.

About the ‘IMRG Capgemini Online Retail Index’

The IMRG Capgemini Online Retail 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.

About IMRG

For over 20 years, IMRG (Interactive Media in Retail Group) has been the voice of online 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 indices provide in-depth intelligence on online sales, mobile sales, delivery trends and over 80 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.

About Capgemini

Capgemini is a global leader in partnering with companies to transform and manage their business by harnessing the power of technology. The Group is guided everyday by its purpose of unleashing human energy through technology for an inclusive and sustainable future. It is a responsible and diverse organisation of over 325,000 team members in more than 50 countries. With its strong 55-year heritage and deep industry expertise, Capgemini is trusted by its clients to address the entire breadth of their business needs, from strategy and design to operations, fuelled by the fast evolving and innovative world of cloud, data, AI, connectivity, software, digital engineering and platforms. The Group reported in 2021 global revenues of €18 billion.

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