Online retail sales continues upwards trajectory in April

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online retail sales

UK online retail sales went from strength to strength in April, a stark contrast to various reports of bleak conditions on the high street for the same month.

According to the latest figures from IMRG and Capgemini’s monthly e-Retail Sales Index, online retail sales went up 18.8 per cent year-on-year – the highest year-on-year increase since November 2016.

Growth for the first four months of the year has also come in at 16.2 per cent, compared to the 12.2 per growth recorded throughout the second half of 2017.

However, there was a fall in the overall market conversion rate – down 4.15 per cent compared to 4.3 per cent this time last year – marking the fifth consecutive decline this year.

IMRG and Capgemini said this was likely to be due to the increasing penetration of sales made through smartphones, which generally have lower conversion rates.

Meanwhile, average basket values (ABV) increased – jumping £14 month-on-month to £117.12 for multichannel retailers, and by £3.50 to £87.16 for online-only retailers.

April featured the first really warm weather of the year, which had an impact on the growth in almost all sectors.

In clothing, sales increased 15.6 per cent year-on-year, and the garden sector also grew by 12 per cent.

Comparatively, a weaker month for home, which decreased by 15.6 per cent, brought the overall home and garden sector increase to 4.6 per cent versus last year.

“Growth in online retail sales revenue has been markedly higher than expected throughout 2018 so far,” IMRG insight director Andy Mulcahy said.

“One reason is likely to be related to a turnaround in economic fortunes – while inflation outstripped wage growth for most of 2017, the gap has closed in recent months and wage growth was actually higher than inflation in March 2018.

“This means that, on the whole, UK shoppers should be feeling a bit more confident in making purchases.”

He added: “What has been very apparent is that it is online retail that is benefiting, while the high street is facing a sustained downturn.

“Up until now, there have been multiple reasons to suspect that this split in performance may have been influenced by various external – and therefore temporary – factors; the above-average rainfall in January, the snow in February/March, Easter being early this year.

“The fact that April 2018 is comparing against an April last year that included Easter – with the boost to retail that it typically brings – suggests that this is not a blip.

“As shoppers have started to find themselves with a bit more disposable income in 2018, we are possibly witnessing an acceleration in the shift of shopper behaviour over to online.

“Much of the coverage of the downturn on the high street sees it as a negative development – but actually shoppers are still shopping as much as they did before, it’s not retail that is suffering; it’s just undergoing a digital transition at a far faster pace than was previously the case.”

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