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Summer Olympics Weaken Online Sales in August


News provided by

IMRG (Interactive Media In Retail Group)

19 Sep, 2012, 22:33 GMT

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LONDON, September 19, 2012 /PRNewswire/ --

Brits distracted by team GB glory

  • £5.8 billion spent online during August 2012
  • Index sees year-on-year growth of 11%; 3rd lowest YOY growth in 2012
  • Mobile retail soared 294% year-on-year

According to the latest figures from the IMRG Capgemini eRetail Sales Index, British shoppers spent £5.8bn online in August, a year-on-year growth of 11%, but dropping 11% on July.

While a decline between July and August is typical (-6% in 2011 and -8% in 2010) with the start of the Autumn school term, the decline was particularly significant this year, however, with the Olympics distracting regular online shoppers. Despite the disappointing performance, and in contrast to the wider retail sector, e-commerce is growing - the year to date Index has grown 13%, as per earlier forecasts for the year.

It seems the country's determination to cheer on team GB's heroes affected most of the sectors in August. Despite what has been a very solid year-on-year performance over the last four months, growth in the Electrical sector fell to just 11% and reported a month-on-month decline of 2%. The sector peaked in the run up to the Olympics at the end of July when sales of high definition televisions and SLR cameras spiked as part of the nation gearing up for the games, but once the likes of Mo Farah, Jess Ennis and Ellie Simmonds took to the stage, sales came to an abrupt slowdown.

Clothing also struggled last month. Despite the arrival of autumn-winter ranges and the late summer sales , the sector failed to draw many takers, recording growth of only 11% year-on-year and dipping 18% on July last month.

The Travel sector saw an annual growth of 9% and dropped 7% month-on-month. While this decline could be attributed to the Olympics and the desire to stay at home to watch the Games, with school holidays coming to an end, this dip is quite typical for the season.

In contrast to the overall Index results, Gifts and Health & Beauty grew 41% and 25% year on year, respectively.

M-commerce sales, shopping via mobile/handheld devices, continued to perform particularly well in August, with the m-Retail Index reporting a growth of 294% on the same time last year and up 280% year-on-year, excluding travel sales. As with the e-Retail Index, the conversion rate , i.e. the actual sales which materialised out of website surfing, improved marginally proving that shoppers were more focused in their browsing and made less ineffective visits online.

Year-on-year growth of online-only retailers continues to exceed that of multichannel retailers, growing 15% year-on-year as compared to the 8% growth of their multichannel counterparts. In the last three months online-only retailers have been growing by an average of 6% year-on-year more than multichannel retailers.

Chris Webster, head of retail consulting and technology, CapgeminiUK said: "It is very common for August to see aslight decline in e-retail sales, but it is interesting to see just how much an added impact the Olympics had. It will now be up to retailers to capitalise on the changing season, and make sure the correct strategy is in place as we enter the run up to Christmas.

"Mobile commerce, although slowed slightly last month, continues to grow at a healthy pace. This will be a particularly important channel for retailers this winter, as many more shoppers will be making the most of the developments in mobile technology for their Christmas shopping."

Tina Spooner, Chief Information Officer, IMRG, comments: "While online retail sales saw a boost during July in the run up to the Olympic Games, the same cannot be said during the event itself.  The 11% growth recorded in August is below the average Index performance year-to-date and is perhaps an indication that Olympic fever did not have an overall positive impact on the online retail industry.

"While sales via mobile devices also recorded lower annual growth than seen in recent months, the m-Retail Index also reveals that the average spend via mobile devices was the lowest recorded during 2012. However, sales via mobile devices have grown a staggering 320% year-to-date compared with the same period in 2011 and by the end of this year we expect m-retail to account for around 20% of online sales in the UK".

                                % Change in Index   % Change July
                                August 2011 -       2012 on August
    Sector                      August 2012         2012
    Beers, Wines and Spirits                     2%            -2%
    Clothing, Footwear and
    Accessories                                 11%           -18%
    - Accessories                               39%            -3%
    - Footwear                                  11%             2%
    - Lingerie                                  -3%             4%
    Travel                                       9%            -7%
    Electricals                                 11%            -2%
    Gifts                                       41%             5%
    Health and Beauty                           25%           -10%
    Other                                       12%            -7%

Industry Quotes

Omid Rezvani, Director of Mobile Solutions, eCommera comments: "August saw a further slowdown in year-on-year growth in mCommerce. Given the distractions of summer holidays and sporting moments this is not entirely surprising. That said, at 280%, mobile is still undoubtedly the fastest growing element of retail, and the bounce back in average conversion to 1.5% is an encouraging sign. It will be very interesting to watch the trends as we approach the peak trading period.

"For retailers seeking to capitalise on this growth the task of creating an optimum experience for every mobile customer is undoubtedly going to get harder. The tablet market in particular is likely to fragment with a range of keenly priced new entrants becoming available. Allowing customers to augment their on-the-move and in-store experience using their smartphone, whilst focusing on conversion through their tablet of choice should be the essence of every mobile strategy. "

Zak Edwards, CEO , Prezzybox comments:  "Our sales during August were up 20% on the same month last year which is great!.  However, times are still tough and the economic climate doesn't appear to be recovering any time soon, but it really does focus the mind and the direction of the company.  Whereas years ago we would do things which were "nice to do", now everything we do has a cost / benefit analysis attributed to it.  If there is no direct or indirect benefit on sales we don't do it! Simples."

Notes to Editors

About IMRG

IMRG (Interactive Media In Retail Group) is the UK's industry association for e-retail. Formed in 1990, IMRG is setting and maintaining pragmatic and robust e-Retail Standards to enable fast-track industry growth, and facilitates its community of members with practical help, information, tools, guidance and networking. Consumers can be confident when dealing with IMRG Members because all have committed to operate using methods that are Honest, Decent, Legal, Truthful and Fair, and have undertaken to not bring the industry into disrepute. The strength of IMRG is the collective and co-operative power of its members.

About Capgemini

With around 120,000 people in 40 countries, Capgemini is one of the world's foremost providers of consulting, technology and outsourcing services. The Group reported 2011 global revenues of EUR 9.7 billion. Together with its clients, Capgemini creates and delivers business and technology solutions that fit their needs and drive the results they want. A deeply multicultural organisation, Capgemini has developed its own way of working, the Collaborative Business ExperienceTM, and draws on Rightshore®, its worldwide delivery model.

Learn more about us at http://www.capgemini.com.

Rightshore® is a trademark belonging to Capgemini

About the 'IMRG Capgemini e-Retail Sales Index'

The IMRG Capgemini Index, which was started in April 2000, tracks 'online sales', which we define as 'transactions completed fully, including payment, via interactive channels' from any location, including in-store.  These sales are predominantly internet-based today, but the Index remains ready to record e-retail sales conducted via whatever interactive channels the market may embrace in the future.

Index Participants

Around one hundred e-retailers now regularly contribute data to the IMRG Capgemini Index, including A. Hume Country Clothing, Airport Parking & Hotels Ltd, Amara, Arcadia Group (Burton, Top Man, Top Shop, Dorothy Perkins, Evans, Wallis, Miss Selfridge), Ask Direct, ASOS.com, Bank, Berry Bros & Rudd,  Binends.com, Blacks, Boden.co.uk, Boohoo.com, Boots Direct, Boutique to You, Brandosa.co.uk, Brora, Buyagift.com, BuyItDirect.co.uk, Carphone Warehouse, Charles Clinkard, Charles Tyrwhitt,  Clarks, Cloggs, Cocosa, Co-operative Travel, Crocus.co.uk, Dabs.com, Damart, Debenhams, Effortless Skin, Ethical Superstore, Firebox, First Choice, Freemans Grattan Holdings, Furniture123, Game, Gamestation, Getting Personal.co.uk, Greenfingers.com, Home & Cook, House of Fraser, JD Sports, J D Williams, John Lewis Partnership, Ladderstore.com, Lastminute.com, LK Bennett, Lookfantastic.com, Lyco Direct, M and M Direct, Majestic Wine, Marks & Spencer, Matalan, Millets, Naked Wines, NaturalCollection.com, New Look, Next, Perfect Handbags, PetPlanet.co.uk, Philip Kingsley, PIXmania, Prezzybox.com, Purely Gadgets, QVC, Redfoot Revolution, Richer Sounds, Sainsbury's, Scales Express, Schuh, Scotlight Direct, Scott, Shoe-Shop.com, Shop Direct Home Shopping (Additions, Great Universal, Kays, Littlewoods, Empire, Woolworths, Very, Isme), Serenata Flowers, Size, Slurp.co.uk, Sofa and Home, Sparkling Strawberry, Sunshine.co.uk, Tesco.com, The Body Shop,  The Fragrance Shop, The Mat Factory, The Natural Skincare Co, The Natural Store, The White Company, ToxicFox, TUI UK, Turton Wines, Waitrose, Warehouse, Wilkinson Hardware & Wynsors World of Shoes.

Distributed by PR Newswire on behalf of ad:tech


 

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