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October online growth remains negative after a tough summer

8 Nov 2022
  • UK online retail sales were down -3.4% Year-on-Year (YoY) in October, compared to already negative growth in October 2021 (-7.3%)
  • This is below the 3- and 6-month averages (-3.1% and-2.5%), but still ahead of the and 12-month (-11.5%) average
  • Month-on-month (MoM) growth was up +11.7% against September, in line with previous years in the lead up to the holiday season (11.9%)
  • Traffic to online retail sites increased by +2.1% YoY, yet online visitors are not converting into customers at the same rate as previous years (-20% lower than 2021)

London UK – 8th November 2022: October represented the nineteenth consecutive month of negative Year-on-Year (YoY) growth in online retail, where sales were down -3.4%. That’s according to the latest IMRG Capgemini Online Retail Index, which tracks online sales for 200 retailers. Month-on-month (MoM) figures recorded a positive +11.7% uptick from September, suggesting current demand trends in the lead up to the seasonal period are in line with previous years – which sounds like good news as we enter the Black Friday month, however, against a weak growth of sales throughout the summer, YoY for November is likely to remain negative.

On a positive note, growth in traffic to online retail sites was up +2.1% YoY in October, indicating interest in shopping is still there. A noticeable challenge for retailers is that online visitors are not converting into customers at the same rate of previous years, with the conversion rate consistently around -20% lower than that recorded across 2021

Historically, the transition from summer into autumn tends to increase consumer spend as people begin to prepare early for Christmas. As a result, every category in October, with the exception of garden, saw positive MoM growth. Looking at a YoY perspective, furniture was the standout category, up +2.9% YoY, although this uptick was slower across premium brands indicating a more cost-conscious consumer spend. Meanwhile, clothing, which has seen positive sales for most of the year, experienced flat growth last month. Health and beauty (-7.2%), electricals (-7.6%) and home and garden (-5.1%), were among the most noticeable YoY declines.

Andy Mulcahy, Strategy and Insight Director at IMRG: “The gifts category gives us an indication of the challenging trading environment at the moment; it is experiencing declines of –20% and more in some weeks; this comes on top of declines of -30% for the same weeks in 2021. Shoppers may really tighten their spend in areas such as gifts, which isn’t great news for Christmas demand.

“Furthermore, the timing of the chancellor’s autumn statement, currently scheduled for the Thursday before the start of Black Friday ‘week’, and where many expect the announcement of tax rises, it seems likely that shopper confidence will be dented further at the worst possible time for retailers.”

Simon Binge, Commerce Senior Manager, Customer Transformation at Capgemini: “Even in categories that are bucking the trend for October, like Furniture, we can see clear evidence that the macro-economic environment is having an impact on consumer behaviour.  Whilst Furniture was up +2.9% YoY, we can see that this growth is being driven by budget (+7.8% YoY) and mid-market (+9.8% YoY) retail categories, whereas the premium category is down a rather scary -42.8% YoY. The trend of trading-down can also be seen across home & garden, gifts, and clothing where the budget & mid-market categories are outperforming their premium counterparts.”

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 350,000 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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