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The value of online retail sales grew 18.9% year-on-year in October -the highest rate in any month since November 2014, when Black Friday had a huge impact on pre-Christmas shopping patterns, according to the IMRG Capgemini eRetail Sales Index.
Across the sectors, sales of home goods performed particularly well up 23.9% year-on-year and up 21.8% on September. IMRG said this could have been spurred by a deteriorating pound, with people more focused on domestic home improvements rather than spending on holidays abroad – which have become a lot more expensive since the Brexit vote. This renewed focus on higher-ticket items – combined with impulse purchasing at full price – may help to explain an increase in the Index’s average basket value to £90 – the highest since March 2011.
Across mobile channels, tablets made a resurgence, with sales completed on the devices up 6% year-on-year. In the lead-up to Black Friday, it may be the ease of browsing multiple sites and products on tablets that has boosted their use over smartphones, which offer smaller display screens.
Interestingly, the Index also recorded its lowest conversion rate – the percentage of website visits that result in sales – since February 2013, at just 4.1%. IMRG said this may suggest that ahead of Black Friday, increasing numbers of people are visiting company websites to browse and build wish lists. Although this may initially seem to contradict the high overall growth, it may have been sustained by an increase in both the number of site visitors and the amount of impulse purchasing completed at full price whilst browsing.
IMRG managing director Justin Opie commented: “The Index has performed ahead of expectation so far in 2016 –and October’s results continued this trend. On the surface, a drop in conversion should logically lead to lower growth, but a five-year high for basket values and the likelihood of increased site traffic as people start researching in advance of Black Friday seems to have offset any negative impact.
“In recent years Black Friday has become an incredibly important period for determining a retailer’s success at the peak time of year. So retailers will hope that higher basket values can be sustained over the coming few weeks.”
Bhavesh Unadkat, management consultant in retail customer engagement design at Capgemini, added: “It’s very reassuring to see the market perform so well. Despite some of the economic uncertainty we’ve experienced since the summer, consumer confidence clearly remains strong. The performance was likely boosted by multi-channel retailers holding discount days which helped drive incremental traffic and sales.
“October’s results offer a very positive indication of what retailers can expect from the fast-approaching festive period. However, it will be up to retailers to make sure they capitalise on these vitally important trading periods.”
The IMRG Capgemini e-Retail Sales Index, which was started in 2000, tracks ‘online sales’, which it defines as transactions completed fully, including payment, via interactive channels from any location, including in-store. Over 100 e-retailers regularly contribute data to the Index.
IMRG (Interactive Media in Retail Group) is an e-retail membership community comprising e-retail businesses of all sizes: multichannel and pureplay, SME and multinational, and solution providers.
Capgemini is a global company specialising in consulting, technology and outsourcing services.
