Bad weather prompts electrical goods summer surge

| Press release
The latest IMRG Capgemini e-Retail Sales Index reveal a £4.4 billion online spend in August,a year-on-year growth of 28% in Electrical goods and a 14% year-on-year increase in Travel sector as travellers sought online deals.

The latest results from the IMRG Capgemini e-Retail Sales Index reveal that British shoppers spent a total of £4.4 billion pounds online during August, equivalent to £721 per person.

The Index saw an impressive 15% increase compared to August 2009, and year-to date e-retail sales are also up 15% on the same period last year, above the predicted growth of 13%. Evidence of the increased popularity in online retail was seen this week, with Boden, the mail order clothing brand, reporting a 16% increase in pre-tax profits.

The surge in electrical goods, which saw a year-on year growth of 28% and a 10% increase in online sales from July, is attributed to the coolest August for 17 years2, persuading consumers to invest in a night on the couch, rather than a night on the tiles. In addition, the start of the Autumn TV schedules, which sees the return of popular shows like Mad Men, saw shoppers splash out for new home entertainment systems.

Significantly, the Index shows that based on the average basket spend, British consumers spent more on electrical goods online, in August (£211), than any other month in 2010. This is the first time the average spend on electrical goods exceeded the £200 mark since October 2007.

The poor weather had an impact on the travel sector too. Despite the average basket value of just £580, compared to £652 in August 2009, the number of holidays bought online saw a year-on-year increase of 14%. With low basket values it is clear airlines have dropped their prices in an effort to lure holiday makers online for end of summer holiday deals.

The report highlighted that August was a particularly strong month for multi-channel retailers, showing a year-on-year growth of 25%, suggesting high street brands are recognising the overwhelming benefits of a strong online offering.

Chris Webster, Vice President, Head of Retail Consulting and Technology, Capgemini, said: “August was an interesting month for the Index; highlighting some unique sector spikes and a good overall performance for online retailers. Several factors could be attributed to the impressive jump in online sales for electrical goods, including the introduction of high-tech home entertainment systems and the poor August weather.

The weather and the need for holiday providers to lower their prices to tempt travellers into last minute bookings are the most likely reasons behind the growth in the travel sector.”

Tina Spooner, Director of Information at IMRG, comments:

“August was another good month for e-retailers, with consumer spending up 15% compared to the same month last year. Sales of electrical goods were particularly strong as Britons upgraded to high-definition televisions and invested in new technology, resulting in the highest average spend in this sector for almost three years. The online travel sector also fared well, as travellers took advantage of last minute cut-price holidays during the height of the holiday season.

With 31 million UK consumers now shopping online, the internet continues to be a lucrative channel for retailers that can adapt to shoppers’ changing behaviour during these uncertain times.”

Industry quotes:

David Stratton, Head of Sales at HolidayExtras.com, comments:

”August saw a continuation of positive year-on-year online growth, bolstered by the coldest August in the UK since 1993 and twice the average monthly rainfall in some areas.

Specifically, airport parking bookings increased +13% year on year (Jul +7%), airport hotel bookings +7% (Jul +4%), and overall +9% (Jul +5%). There was strong growth regionally, including Liverpool (+41% year on year), Luton (+34%) and Manchester (+29%). These regional successes compare well with Gatwick (+5%) and Heathrow (+10%).”

Cameron McLean, General Manager for merchant services at PayPal UK, said:

“Sales of electrical goods are a key factor in boosting the online retail sector. According to this year’s PayPal UK Online Retail Report shoppers are spending more per head in this sector than they were a year ago. We’ve also seen that it’s electrical goods as well as travel and financial services that regular online shoppers buy most of on the internet. Over half of regular internet shoppers (51%) buy electrical goods online compared to just 11% who buy health and beauty products suggesting shoppers prefer to buy these items offline.”

Mark Lewis, CEO at Collect+ comments:

“The sale of electrical goods online continues to be strong, but importantly the average purchase price of these goods has risen above £200. This goes to show that consumers are still eager to get their hands on the latest technology like 3DTVs, no doubt spurred on by the dreadful weather at the end of the summer. Whilst consumers’ appetite to get big ticket items online is encouraging, internet retailers still need to ensure that customer service, particularly the delivery and return of goods, is spot on, offering choice and flexibility, to encourage brand loyalty.”

Bruce Fair, Managing Director at Kelkoo, comments:

“There’s been a sensational appetite for consumer electronics and gadgets this summer with headline releases including the iPhone 4, the Dyson Airblade and the introduction of 3D TV. We expect to see spend on electrical goods rise even more as we approach Christmas, with the excitement already building for new motion capture gaming formats from Xbox 360 and PS3 at the top of many people’s lists.”

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 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.

1Calculation by 4.4 billion, divided by 61,414,062 (www.google.com/publicdata)
2http://news.bbc.co.uk/weather/hi/uk_rev iews