£6.4 billion expected to be spent online this Christmas

| Press release
The latest IMRG Capgemini e-Retail Sales Index predicts an early Christmas peak as savvy shoppers migrate online to spread the cost

• Online Christmas sales expected to be 16% higher than last year as shoppers hunt for bargains
• £4.8 billion spent online in September
• Clothing sales rocket as shoppers brace for a chilly winter

19th October 2010:  The latest results from the IMRG Capgemini e-Retail Sales Index reveal that British shoppers spent a total of £4.8 billion online during September (year-on-year growth of 24%), equivalent to £791 per person and bucking the recent fall in sales on the high street.

Apart from home and garden, which saw a decrease of -1%, all of the retail sectors represented on the Index have shown a year-on-year and like-for-like growth of at least 10%, with clothing, footwear and accessories up 28% from September 2009. This impressive growth is attributed to consumers looking to keep spending in check by shopping online for the best deals.

These figures are particularly significant when compared to the recent British Retail Consortium figures that identified a dramatic decline in non-food store sales. “The disparity between these figures reveals a very interesting trend amongst British consumers”, commented Chris Webster, head of retail consulting and technology at Capgemini. “Purse strings are getting tighter as concerns about the Government’s austerity drive begin to have an impact on consumer spending confidence. The rise in online spending is at the expense of high street sales and we may even see an early peak with shoppers looking to spread the cost of Christmas over several pay cheques.”

The idea consumers are looking to spread the cost of Christmas is supported by the huge jump in gift sales during September, which saw a 32% year-on-year increase and an 8% rise from August.

Based on 2010 Index results, which saw a year-to-date growth of 16%, IMRG and Capgemini have generated a new set of forecasts for Q4 2010:

- Total online spend in the fourth quarter will reach an estimated £17.4 billion, up from £15 billion in Q4 2009
- In December 2010 it is predicted that £6.4 billion will be spent online, up from £5.5 billion in December 2009
- The estimated total-spend for 2010 is £57.8 billion, up 16% from £49.8 billion in 2009.

Tina Spooner, Director of Information at IMRG, comments: “Despite a continuing decline in consumer confidence, the online retail market is growing ahead of our expectations, with a double-digit rise in yearly sales recorded in each quarter of 2010. Concerns over the impending Government spending cuts, VAT increase and job security, together with falling average households’ disposable income, are all contributing to driving this positive e-retail performance as consumers turn to online retailers to secure the best deals. During the fourth quarter we estimate that the UK e-retail market will reach £17.4 billion, with sales during December alone reaching around £6.4 billion as shoppers flock online during the festive season.”

The recent findings revealed that online sales have seen a steady year-on-year increase throughout 2010. In Q1 the figure stood at 11%, and in Q3 it had jumped to a significant 19%.

The performance of the Index mirrors individual stand-out performances by multi-channel retailers such as Sainsbury’s, Tesco and John Lewis, which have all reported strong online sales growth. The year-on-year growth for such multi-channel retailers is up 31% according to the e-retail sales Index. In contrast, pure-play recorded only half the growth, with a still impressive 15%.

Sector Performance

Alison Wade, Head of Marketing, Buyagift.com, comments: “In this difficult trading environment we are seeing people planning their Christmas shopping further in advance than previous years. At the beginning of September we launched our strongest ever range of Christmas offers - a month earlier than last year. These offers help cement our value proposition, drive conversion and benefit shoppers looking to spread the cost of Christmas. We are also looking to support our usual online channels with an extensive offline marketing investment including TV, DM and PR. This will drive large scale awareness of Buyagift.com, bring new users to the site and showcase our extensive range of gifts and experiences.”
Phillip Rinn, Director of Advertising Partnerships, UK and EMEA, eBay Advertising, comments: “As online shopping accelerates in the run-up to Christmas, retail sites are a great platform for advertisers wanting to benefit from a wide audience of consumers in a purchase-mindset. With the latest IMRG Capgemini Index showing an additional £1bn spent online in September 2010, compared to the previous year, it’s clear online shopping is now mainstream, with consumers looking to the internet for an increasingly diverse range of products and services. At eBay Advertising, we use our in depth customer insights to react to changes in consumer behaviour and collaborate with brands to navigate the online high street, by connecting with consumers, with the right message at the right time.”
Bruce Fair, Managing Director of Kelkoo UK, comments: “The retail industry is traditionally viewed as a leading indicator of economic trends and results this Christmas will prove vital in stimulating retail growth and overall economic recovery. The fact that online sales have risen in September despite consumer confidence dipping below expectations is an indication that the Web is set to mount a real challenge to the dominance of the high street in the crucial run-up to Christmas. Shoppers will continue to strive to get the very best prices whilst side-stepping the imminent rise in VAT and as a result online commerce will prove the driving force for overall retail growth this festive period.”

Mark Lewis, CEO, Collect +, said: “It is encouraging to see that consumers are continuing to spend online in spite of confidence slipping as talk of cuts increases. But online and multi-channel retailers are going to face a crucial quarter with significant challenges ahead, and not just less money in consumers’ pockets. With The Postal Services Bill raising the prospect of industrial action at Royal Mail, e-retailers need to ensure that they have sufficient choice in delivery and returns to ride out any strike action. It is vital that online retailers continue to offer the level of service that customers expect during the trading period in the run up to Christmas.”
Paul Zimmerman, Managing Director, Firebox.com comments: “Sales at Firebox.com were up 35% year on year in September and our top ten best selling products (in terms of revenue) were the more fun, less expensive items with an average price of under £20.
Firebox customers certainly began shopping for Christmas gifts at Firebox in early October but in September, the items purchased from us were definitely a mixture of gifts and self-purchases. Firebox customers were buying a lot of our fun, less expensive items (such as the Putty Monsters and Silly Bandz) as well as a few of our slightly more expensive, but still fun, yet more practical items (such as the Wifi Bathroom Scales and Polaroid Cameras).”
John Smith, co-founder of GettingPersonal.co.uk, says: “We have seen consistent strong growth throughout the year with September being no exception. There is no doubt our customers are shopping earlier for Christmas this year, with September seeing a YOY trebling of traffic on key Christmas terms. We are continually providing our customers with unique and innovative new products, and this combined with delivering excellent service means our customers remain loyal and keep returning month after month.”

For further information please contact:
Andrew Nankervis – 020 7025 6465 (andrew.nankervis@redconsultancy.com)


Notes to Editors
About IMRG
IMRG (Interactive Media In Retail Group) is the industry body for global 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
Capgemini, one of the world’s foremost providers of consulting, technology and outsourcing services, enables its clients to transform and perform through technologies. Capgemini provides its clients with insights and capabilities that boost their freedom to achieve superior results through a unique way of working, the Collaborative Business ExperienceTM. The Group relies on its global delivery model called Rightshore®, which aims to get the right balance of the best talent from multiple locations, working as one team to create and deliver the optimum solution for clients. Present in more than 35 countries, Capgemini reported 2009 global revenues of EUR 8.4 billion and employs over 100,000 people worldwide.
More information is available at www.uk.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.

Over one hundred e-retailers now regularly contribute data to the IMRG Capgemini Index, including Airport Parking & Hotels Ltd, Amara, Arcadia Group (Burton, Top Man, Top Shop, Dorothy Perkins, Evans, Wallis, Miss Selfridge), ASOS.com, Beautique.com, BeCheeky.com, Binends.com, Blacks, Boden.co.uk, Boohoo.com, Boots Direct, British Bookshops & Stationers, Brora, Buyagift.com, BuyItDirect.co.uk, Carphone Warehouse, Charles Tyrwhitt,  Clarks, Cloggs, Comet, Co-operative Travel, Crocus.co.uk, Dabs.com, Damart, Daxon, Debenhams, Dobbies, e-flowersUK.co.uk, Ethical Superstore, Figleaves.com, Firebox, First Choice, Freemans Grattan Holdings, Furniture123, Game, Gameplay, Gamestation, Getting Personal.co.uk, GreatValueJewellery.com, Greenfingers.com, Holiday Extras, Home & Cook, House of Fraser, JD Sports, J D Williams, Jack Wills, Jason Shankey, John Lewis Partnership, Ladderstore.com, La Redoute, Lastminute.com, Lighting-Direct, LK Bennett, Lookfantastic.com, M and M Direct, Made in Sheffield, Marks & Spencer, Millets, Monster Travel, Musto, My Tuxedo, Naked Wines, NaturalCollection.com, New Look, Next, Peacocks, Perfect Handbags, PetPlanet.co.uk, Philip Kingsley, PIXmania, Prezzybox.com, QVC, R C Roland, Redcats UK, Redfoot Revolution, Richer Sounds, Rubber Sole, Rubicon Healthcare, Sainsbury’s, Scales Express, Shoe-Shop.com, Shop Direct Home Shopping, Schuh, Serenata Flowers, Shedstore, Slurp.co.uk, Sofa and Home, Sunshine.co.uk, Tesco.com, Tesco Electrical, The Fragrance Shop, The Health Supermarket, The Natural Store, TUI UK, Turton Wines, Vertbaudet, Vie at Home, Waitrose, Wallace Sacks & Wilkinson Hardware.

1 Calculation by 4.4 billion, divided by 61,414,062 (www.google.com/publicdata)