UK online retail sales up 12 per cent for 2017

Online retail sales in the UK were up 12.1 per cent in 2017 compared to the previous year, according to IMRG Capgemini’s e-Retail Sales Index. The rate of growth has slowed by almost 5 per cent, something IMRG Capegemini puts down to a ‘maturing market’. In fact the rate of YoY growth was 2 per cent less than was previously forecasted.

The Index performance in 2016 was largely driven by strong sales growth through smartphones, but this slowed in 2017. Sales growth through smartphones averaged 77 per cent each month from July to December 2016. Whereas, in the same period in 2017 it fell to 50 per cent. Likewise, growth through tablets has also stalled (up 0.7 per cent in 2017), and 2018 growth is expected to slow down further for all devices.

Bhavesh Unadkat, principal consultant in retail customer engagement, Capgemini said: “2018 will be ultra competitive with continued uncertainty, retailers will therefore need to be focused on their plans to both survive and grow. One opportunity for growth and differentiation will come from emerging technology as we saw as a focus in 2017 – voice and social commerce, connected devices and AI all drove interest and investment and will continue to do so – the big challenge will remain as how to drive value and industrialising this capability. A second opportunity will be deepening relationships with customers and taking an insight driven approach to omni-channel retail – one which arguably remains a gap for many retailers across channels. Many have got it right across certain channels, however not across the whole customer experience across all channels. Finally, there is sometimes so much focus on technology and innovation we can forget retail basics – ensuring the product mix is right, availability is on point, the shop front is one to be proud of, and ensuring the team are well equipped to give customers the best service can be just as important. 2018 will be volatile but very exciting as we see the great retail industry again raise the bar!”

Meanwhile Justin Opie, managing director at IMRG added: “A decline in the rate of online sales growth in 2017 was forecast, though it turned out to be sharper than expected. The macro economic factors – rising inflation, low wage growth, rise in the interest rate etc – are likely to have been influential and the first half of 2018 may be challenging too; discounting in the lead-up to Black Friday started deep into October in 2017 and have been widely available ever since. It may be that retailers will now find themselves caught in a cycle of discounting, which also happened in 2011 and 2015 and will probably extend long after the January sales, as the trading climate is tough at the moment. That said, 2018 does look set to be a transformational year for retail – with an increasing use of AI services anticipated plus the rise of ‘browserless commerce’ (through devices such as voice assistants). It may be that we see shopper behaviour shift significantly over the coming period.”

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