Discounting encourages 19 per cent online sales growth

A report released today has revealed that online sales last month grew by 19 per cent year-on-year.

This is a 20-month high for online retail and is once again stronger than expected according to analysts, with the average basket value of goods falling from £80.52 in the previous month to £78.39 in July.

Heavy discounting across all retailers following post-Brexit fears and summer sales may have contributed to the strong performance. 

Retailers may also have been influenced by Amazon Prime Day on July 12 forcing them to compete on discounts.

Amazon reported that its orders surpassed the previous year‘s Prime Day by 60 per cent.

The study conducted by IMRG Capgemini Sales Index also suggested a warm July boosted sales. 

The overall clothing sector grew by 22 per cent as shoppers purchased summer wardrobes. This included a 33 per cent rise in accessories, a 24 per cent rise in footwear, a 31 per cent rise in lingerie and a 21 per cent rise in womenswear.

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In other areas, the home sector grew by 50 per cent and the garden sector grew 39 per cent. Alcohol was the only sector to decline despite the warm month, but only by one per cent.

There was a surprise growth for multichannel retailers who also recorded a 13 per cent increase in online-only sales reaching a 13-month high. 

In comparison, multichannel retailers reported a slower growth rate in June with online-only retailers reporting a 23 per cent growth point advantage.

“It’s great to see that the Index registered such a strong July performance – the biggest growth since November 2014,” Capgemini management consultant Bhavesh Unadkat said.

“Indeed, many of these retailers had reactive plans in place to match the discounts offered by Amazon Prime Day, which goes some way to explaining the drop in basket value. These low prices spurred high volume sales which ensured double digit growth.

“Finally, the figures were also bolstered by an encouraging economic position which increased consumer confidence, alongside, of course, some great weather.”

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