Beast from the East warms online retail with 13.1% growth

online retail sales

The Beast from the East resulted in a spike in online retail spending at the end of February and contributed to a 13.1 per cent overall growth year-on year.

According to the latest figures from the IMRG Capgemini e-Retail Sales Index, the heavy snow in the final week of February prompted consumers to warm up to online shopping at home, driving a 3.5 per cent lift in sales compared to the previous week.

These figures continue what has been a positive start for UK online retail sales, with overall year-on-year growth averaging 13.5 per cent year-to-date.

However, the overall market conversion rate – the percentage of site visitors that complete a purchase – was 4.2 per cent, down from 4.6 per cent last year.

The conversion rates for both multichannel and online retailers also came in lower than February 2017.

Despite this, the average basket value (ABV) rose by £11 in comparison to last February.

Meanwhile, smartphone growth remained strong at 38.5 per cent on last year, but is slowing when compared to the 57 per cent growth of last year.

On the other hand, tablets continued their now four-month long decline trend, decreasing 6.7 per cent year-on-year – a record low for this device.

In terms of sectors, health and beauty was the star performer in February, growing by 33.85 per cent year-on-year – its highest growth in the last five years.

Clothing continues to show strong year-on-year growth, up 14.9 per cent, with accessories and footwear the top performers within this at 22.3 per cent and 20.4 per cent respectively.

Finally, gifts also grew nine per cent year-on-year, an improvement on last year’s decline of 3.3 per cent.

“February’s sales patterns clearly demonstrate the power of extreme weather on shopping habits; as people avoid the high street in favour of cosier shopping from their well-heated living rooms,” Capgemini principal consultant Bhavesh Unadkat said.

“As the snowy weather continued well into March we anticipate a continuation of this trend in next month’s results.

“We’d also draw attention to the performance of the US retail market, which has just reported its third consecutive month of falling sales.

“As the US market is often seen as ahead of the UK’s this could foreshadow a similar trend in the coming months.

“Fortunately for internet retailers, the US reported one per cent online sales growth.”

IMRG managing director Justin Opie added: “Over the course of many years, the overall conversion rate for online retailers crept up very slowly but this has stalled recently and has now actually been in decline for three consecutive months.

“This suggests that shoppers are spending more time browsing, potentially across a greater range of sites, before making a final purchase decision and that may well be true, but a clear influencing factor is a shift in the devices people are using for shopping.

“In Q4, 32 per cent of online retail purchases were completed on smartphones (the rest were through desktops and tablets) – these devices tend to have lower conversion rates due to a variety of reasons, particularly how much more susceptible users are to being distracted when using them.”

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