Online retail sales in the UK began 2017 on positive note, with sales up by 12 per cent year-on-year in January.
According to the latest figures from the IMRG Capgemini e-Retail Sales Index, growth in January was also up by 15 per cent when compared to December.
The average basket value for online retailers was recorded as £85 in January 2017 – up from £79 a year earlier and making it the highest value for that month since January 2010. In addition, the index average in 2016 was £81.
While multiple retail sectors – including clothing, gifts and accessories – recorded a rise in average basket value, electricals dropped by 12 per cent, down to £129, compared to January last year.
Electricals online sales also decreased by nine per cent year-on-year, falling for the second month running.
READ MORE: Online retail sales smashes records in 2016
Looking at other sectors, sales growth for clothing retailers was up 11 per cent year-on-year. While IMRG and Capgemini said this was a “respectable figure”, it was actually the lowest growth rate for clothing since March 2016.
However, growth for the gifts sector surged by 62 per cent year-on-year, an eight-year high.
IMRG managing director Justin Opie said that while these figures indicate a steady start for the year, the effects of Brexit and rising costs will create challenges for online retailers.
“The most pressing one relates to the devaluation of the pound following Brexit, as it means price rises are looming for an industry where retailers often get pressured into a cycle of discounting to stimulate sales activity among customers,” he said.
“One area where we may see a big impact is electricals – already having a tough time online with sales growth down -8.5 per cent in January and the average basket tumbling.
“Sonos, Microsoft and Apple among others have recently announced big price hikes of 20 per cent and over to come, so retailers in this sector may continue to have a difficult period to navigate going forward.”
READ MORE: Online shoppers were up in November, but basket value declined
Capgemini retail customer engagement consultant Bhavesh Unadkat agreed.
“The rise in inflation will raise caution among shoppers and with price hikes expected across petrol, electricals and food, this caution will remain for some time to come,” he said.
“The focus for retailers in 2017 should be on ensuring they can capture as much of the UK market share as they can, as well as exploiting international sales, should the pound weaken.”
Last month, the e-Retail Sales Index revealed that British consumers spent £133 billion online in 2016, £18 billion more than the amount spent in 2015.
This 16 per cent growth exceeded the initial forecast of 11 per cent and IMRG and Capgemini forecasted online retail would record a further 14 per cent growth in 2017.
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