// Online retail sales rebound in October, but the growth rate is still lowest ever for that month
// Online sales grew by 6.2% year-on-year in October, according to the latest eRetail Sales Index
// The slightly more positive results exceeded the 3-month, 6-month, and 12-month rolling averages of 5%, 4.5% & 5.1% respectively
Online retail sales enjoyed a rebound in October despite the growth rate still being the lowest ever for that month, new data has shown.
According to the latest eRetail Sales Index from IMRG and Capgemini, retailers were given a much needed boost in October with online sales growing by 6.2 per cent year-on-year.
While this is still behind the five-year average of 10 per cent, October’s results beat the three-month, six-month, and 12-month rolling averages of five per cent, 4.5 per cent, and 5.1 per cent respectively.
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In addition, growth for the overall year is currently tracking at less than half that of the previous 12 months, at five per cent compared to 12 per cent.
Breaking down the results, October’s slightly more positive overall performance was mirrored in a number of categories, including clothing, which grew 5.2 per cent and made a come back from their first negative growth in over two years in September.
Meanwhile, beer, wine and spirits sales grew 4.8 per cent and home sales surged 13.6 per cent.
There was also a small glimmer of hope for electrical retailers, which saw their steady decline in sales slow to a sales drop of 10.5 per cent in October compared to the 15.4 per cent drop recorded in September.
From a channel perspective, online-only retailers had a far stronger month than their multichannel counterparts, with sales growth of 12.4 per cent in comparison to just 4.3 per cent.
Meanwhile a 15.2 per cent rise in m-commerce highlighted a similar divide in growth between smartphones, which surged 50.8 per cent, while tablets declined 8.6 per cent.
IMRG insight director Andy Mulcahy said that while online retail sales performance in October showed signs of improvement compared to recent months, there were signs it was in response to heavy discounting.
“The overall average basket value was down 21 per cent, for clothing it was down 13 per cent, while for electricals it was also down 21 per cent and the revenue growth for that category was still negative,” he said.
“The question now is whether this stronger growth is indicative of an improvement in shopper demand, or whether November sales will struggle as a result of volume being pulled forward.
“This happened in June this year, where sales growth was up 8.5 per cent, the highest of the year, but this was as a result of discounting to stimulate that activity and July growth was the lowest ever for that month as a consequence.
“Retailers will be hoping that Black Friday falling later in the month, after payday, will help sustain shopper demand – but it seems far from certain.”
Capgemini principal consultant Bhavesh Unadkat also said October results showed higher differential in basket value, suggesting greater discounting could be driving this.
“Discounting campaigns are a familiar call to action when retailers are running behind targets to kick start sales activity,” he said.
“However, we have seen that reliance on discounting earlier and earlier in the season dilutes the effect of the flash sale events, such as the adopted, then anticipated, now extended Black Friday sales.
“Will this year be a washout as retailers struggle to capture shopper attention amongst a build-up of tactical discounting, or will shoppers release the purse strings as they look to get the most value for their money in an uncertain climate?”