October online retail growth hints at pre-Black Friday lull

online retail sales

Online retail sales in the UK experienced growth throughout October, but analysts have said it did little to improve what was a “bleak month” for the wider industry and was indicative of a “pre-Black Friday lull”.

According to the latest figures from the IMRG Capgemini e-Retail Sales Index, online retail sales were up 12.6 per cent year-on-year last month – but this was lower than both the average year-on-year growth rate of 14.3 per cent for the three month period ending October, and the five-year October average of 14 per cent.

Despite the high street’s poor performance in October that typically should have been a boost for ecommerce sales, online retail spend remained more subdued than expected.

In addition, fewer site visitors completing a purchase – or conversion – on retail websites suggests a more research-led focus in the lead-up to Black Friday.

IMRG/Capgemini said that further evidence of this “pre-Black Friday lull” could be seen in the average conversion rate for October, which stood at 4.4 per cent.

This was higher than the four per cent recorded in October last year but -0.4 percentage points lower than the three-year average of 4.8 per cent.

However, October’s average basket value was the highest for October in nine years – ringing in at £94.

IMRG/Capgemini said this indicated shoppers were spending more per visit, which suggests they were checking out with multiple items driven by ongoing discounting.

Influenced by the release of big-ticket items such as iPhone 8 in September, electricals also recorded the first positive year-on-year growth in six months at four per cent, after the previous six months’ average of -5.9 per cent.

On the other hand, both menswear and womenswear experienced their lowest year-on-year growth for October since eRetail index records began, at zero per cent and two per cent respectively.

“October was a bleak month for retail,” Capgemini principal consultant Bhavesh Unadkat said.

“You would have expected ecommerce to benefit from a more price sensitive customer, yet the interest rate hike, the bad weather and anticipation of Black Friday did little to help the cause – covering up October’s truly underwhelming performance if anything.

“These coming three months, October through to December, will be important to view performance as a whole and be indicative of whether people are waiting longer before they spend on Christmas.

“Black Friday and the autumn Budget are both important factors in this, so hopefully we will see Philip Hammond outlining some form of catalyst to boost consumer confidence this November.”

IMRG managing director Justin Opie said October was “a very average month” in the context of 2017.

“As the fall in conversion rate suggests, shoppers have been well-trained to expect the best deals to be available during the Black Friday period, so we can anticipate that November will convert a degree of that early research into sales,” he said.

“Last year, the conversion rate was 5.1 per cent in November, while it was just four per cent in October.

“It was surprising to see electricals break its six-month pattern of negative growth in October – with Black Friday looming very large in the public consciousness, we may have expected that trend of decline to continue as shoppers held off on any major purchases, anticipating a much lower price at the end of November.

“The release of a must-have item like the new iPhone model could have influenced behaviour, but it’s likely that the wide availability of discounting last month was also determining.”

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