Strong start to year for online retail sales

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online retail sales

Online retail sales experienced the lowest month-on-month decrease between December and January in five years, as above-average rainfall in the new year prompted consumers to shop online.

According to the latest IMRG Capgemini e-Retail Sales Index, UK online retail sales were up 13.9 per cent year-on-year in January, and the post-Christmas month-on-month sales decline of 20.4 per cent was less than the five year average of 24.1 per cent.

With rainfall above average in January combined with the lowest high street footfall recorded in five years, according to figures from the British Retail Consortium and Springboard, consumers turned to online shopping, especially in clothing and electricals.

Sales growth for the clothing sector was up 16.8 per cent year-on-year, making it its strongest January growth since 2013.

Electricals grew 4.4 per cent year-on-year, compared to the 8.5 per cent decline recorded in January last year.

In addition, the growth in electricals during last month alone is a stark contrast to the 12 month average of a three per cent decline recorded in 2017.

The strong start to the year in overall online retail sales was secured in spite of a dip in the market conversion rate to 4.3 per cent from 4.5 per cent last year, continuing the decreasing trend as customers browse more before purchasing.

Sales via smartphones are also increasing at a lower rate than last year, growing 39.3 per cent year-on-year in January, while growth through tablets suffered a year-on-year decrease 10 per cent.

IMRG managing director Justin Opie said the overall figures for January was “arguably” surprising.

“The economic climate remains challenging, with inflation remaining at three per cent and an interest rate rise anticipated over the next few months,” he said.

“The impact on retail was very apparent in January, with several very large retailers announcing store closures and job cuts – high street footfall also fell to a five-year low for January.

“Yet online appeared to benefit from that, with the index recording the lowest month-on-month decrease between December and January in five years.

“It may be that as we enter 2018, we are seeing signs of an acceleration of the general move over to online, putting pressure on those retailers with large store portfolios to sharpen their focus on rolling out their digital strategy.”

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