Online sales continues to grow, but with a “cloud or two on the horizon”

UK online retail sales increased 15 per cent year-on-year in February, according to the latest figures from the IMRG Capgemini e-Retail Sales Index.

While on this represents a strong month, there were some signs that sustaining this rate of online retail growth could become a challenge.

Growth in sales made on smartphones – a key driver of online retail – has slowed to 57 per cent compared to February 2016‘s 96 per cent, while growth in sales made on tablets also remains low at 3.5 per cent.

However, IMRG and Capgemini said this slowdown through mobile was specific to online-only retailers. For multichannel retailers, which have both an online and in-store offering, growth in sales made on mobile devices was up slightly year-on-year.

An addition, for the second month running, the average basket value of online retail sales in general for the month of February was at a seven-year high, rising nearly £20.

Across sectors, sales for electricals went up by 1.5 per cent, the first time it has come into positive territory after two months of negative growth.

READ MORE: Online retail sales begins 2017 with “steady” growth

Despite this, the average basket value was down £8 year-on-year.

“It‘s encouraging to see the second month of seven-year highs for average basket values in a row,” IMRG managing director Justin Opie said.

“When it comes to smartphones though, the slowdown in sales growth does appear to be fairly dramatic. That said, rates of smartphone growth over the past two years have been very high, and that couldn‘t continue indefinitely.

“The slowdown is specific to the online-only retailers — multichannel retailers are performing better than they have been through mobile, with greatly increased average basket values.”

Opie added that online retail sales remained “positive”, but highlighted a “cloud or two on the horizon”.

“Smartphones have been the driver of mobile growth, and the slowdown could come to impact growth,” he said.

“And, of course, the ever-present uncertainty of Brexit looms large in 2017, with inflation rising and the widely-expected imminent triggering of Article 50 to come.”

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