PCR Tech and IT retail, distribution and vendor news
Despite it reportedly being another difficult month for sales and footfall on the high street, UK online retail sales went from strength to strength in April, up 18.8 per cent year-on-year (YoY) according to the latest figures from the IMRG Capgemini e-Retail Sales Index. This was the highest YoY increase since November 2016 and came in despite Easter falling in March this year.
There was a fall in the overall market conversion rate (down 4.15 per cent from 4.3 per cent year-over-year) marking the fifth consecutive decline this year. This is likely to be due to the increasing penetration of sales made through smartphones, which have lower conversion rates generally. Meanwhile average basket values (ABV) increased – jumping 14 pounds (month on month) to £117.12 for Multichannel retailers, and by 3.5 pounds to £87.16 for online-only.
April featured the first really warm weather of the year, which may have had an impact on almost all sectors seeing growth in April. In Clothing sales increased 15.6 per cent year-over-year, and the Garden sector also grew by 12.0 per cent. Comparatively, a weaker month for Home (decreased by 15.6 per cent year-over-year) brought the overall Home and Garden sector increase to 4.6 per cent versus last year.
Andy Mulcahy, strategy and insight director, IMRG: “Growth in online retail sales revenue has been markedly higher than expected throughout 2018 so far. One reason is likely to be related to a turnaround in economic fortunes – while inflation outstripped wage growth for most of 2017, the gap has closed in recent months and wage growth was actually higher than inflation in March 2018. This means that, on the whole, UK shoppers should be feeling a bit more confident in making purchases. This is reflected in the data we are tracking – if we look at the last six months (Jul-Dec) of 2017, online retail sales growth was 12.2 per cent. The first four months of 2018 has come in at 16.2 per cent.
“What has been very apparent is that it is online retail that is benefiting, while the high street is facing a sustained downturn. Up until now, there have been multiple reasons to suspect that this split in performance may have been influenced by various external – and therefore temporary – factors; the above-average rainfall in January, the snow in February / March, Easter being early this year. The fact that April 2018 is comparing against an April last year that included Easter – with the boost to retail that it typically brings – suggests that this is not a blip. As shoppers have started to find themselves with a bit more disposable income in 2018, we are possibly witnessing an acceleration in the shift of shopper behaviour over to online.
“Much of the coverage of the downturn on the high street sees it as a negative development – but actually shoppers are still shopping as much as they did before, it’s not retail that is suffering; it’s just undergoing a digital transition at a far faster pace than was previously the case.”
Bhavesh Unadkat, principal consultant in retail customer engagement, Capgemini added: “The Electrical sector has shown strong performances over the last few months compared to a poor 2017 for the sector where YOY growth was well below the market trends. Increased consumer confidence could have a part to play in improved purchasing activity along with a mix of contributing factors such as the new technology releases in March including cordless Dyson and Samsung S9 followed by a strong uptake of bank holiday offers in audio and home technology, and the upcoming World Cup has boosted television sales this month.
“This links to a bigger picture as consumers are adopting more technology as part of their everyday life; voice assisted technology is primary driver of smart technology in the home, wearable technology such as health and fitness devices in increasing in popularity, and further innovations in home security and entertainment give a taste of upcoming trends in 2018.
“While retailers benefit from the sales performances it also serves as a reminder that as the integration of technology gathers pace for the consumer it challenges retailers to reflect this in their own customer experiences.”
