The latest figures from the IMRG Capgemini e-Retail Sales Index reveal that shoppers in the UK spent a total of £6.8 billion online during December, equivalent to £111 per person. Sales were up by 7% on November and by 25% on December 2009, with the Index value reaching a record high.
The results round off what has been an impressive year for online retail. A total of £58.8 billion was spent online in 2010, which resulted in the Index increasing by 18%, far outstripping the original prediction of 13%. For 2011, IMRG and Capgemini have predicted the Index will see a further 18% growth, with total e-retail sales estimated to be worth £69 billion.
The December figures showed that despite the dire predictions during the run up to the festive season, online retailers had a very successful Christmas, resulting in an above average year-on-year growth in nearly all sectors. This impressive growth can be attributed to two major factors, the impending increase in VAT and of course the coldest recorded December in the UK for 100 years .
It seems that as the snow fell, shoppers across the country opted to buy online, instead of battling the elements to the high-street. This trend had a positive impact for all online traders, including those with a multi-channel proposition; House of Fraser reported 120% growth in online sales compared to the same period the year before. Similarly, John Lewis and Marks & Spencer reported exceptionally strong results.
In terms of specific sectors, the harsh conditions had an inevitable impact in sales for clothing, footwear and accessories. As the country looked to wrap itself up in winter coats and chunky scarves, the sector saw a year-on-year increase of 40%: the strongest growth for this sector for 19 months. Clothing retailers also experienced a massive 50% leap in conversion rate, suggesting consumers are not just surfing the net to window shop, but researching the best price and placing an order.
Another noteworthy sector is alcohol, which, in keeping with the festive and party season, saw the largest growth, boasting a massive month-on-month leap of 32%. What’s a little less expected is the year-on-year growth as the sector saw a significant 36% increase from December 2009.
Chris Webster, head of retail consulting and technology at Capgemini says: “Online sales in December have grown again off the back of a very impressive November. This is down to two main reasons. Firstly, the spike in sales can be attributed to the season; not only is it traditionally the strongest month for retail but coupled with the heavy snow fall clearly led to many consumers staying at home to do their Christmas shopping. Secondly, the ongoing trend of consumers putting down the car keys and turning on their computers is only set to continue particularly as consumers use the power of the web to make their money go further as the economy recovery remains fragile.”
James Roper, Chief Executive at IMRG, commented: “December saw an incredible jump in online sales as a result of the weather conditions and it’s reassuring to see that despite the coverage of delivery problems, consumer confidence was not affected. Growing confidence and reliance on e-retail during times of adversity, whether that’s harsh weather conditions or belt-tightening as a result of the economy, has been reflected in the impressive growth throughout 2010.”
Jonathon Brown, head of online selling at John Lewis, said: “We’ve had an outstanding Christmas and Clearance period in 2010, and there’s no doubt johnlewis.com was a vital part of that success. Online sales for the five weeks to 1 January 2011 were 42% up on last year, and it was particularly pleasing to have achieved several trading records. We have also now passed the £500m mark for online sales for the year.
“The hard work our team put in over the year to develop the website really paid off, especially when snow affected trade at many of our branches. The increase in online sales, especially during the adverse weather in early December, demonstrated just how important the website has become to our customers.”
Bjorn Kvarby, European Managing Director, Shopping.com, comments: “Technology, fashion and home improvements were key drivers making 2010 a bumper year for Shopping.com, seeing overall growth in December at an average 24% year-on-year. Despite the recession leading to conservative forecasts for 2010, consumers proved that although they may be watching the pennies, they are becoming cannier that ever, attracted to the money and time savings they find when shopping online. Innovative product launches like the iPad have re-ignited consumer interest in the latest technology gadgets, with eBooks and Tablet PCs accelerating growth of our computer category at 50% year-on-year. Secondly, fashion leaped forward with average growth of 45% in December, year-on-year. Finally, with the uncertain property market, consumers turned to updating their homes themselves, with building supplies and home furnishing achieving average growth of 43% year-on-year. The momentum behind online shopping means we’re remaining quietly confident for 2011.”
Notes to Editors
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.
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 30 countries, Capgemini reported 2009 global revenues of EUR 8.4 billion and employs 90,000 people worldwide.
More information is available at 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.
Around 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), Ask Direct, ASOS.com, Beautique.com, BeCheeky.com, Binends.com, Blacks, Boden.co.uk, Boohoo.com, Boots Direct,Brora, Buyagift.com, BuyItDirect.co.uk, Carphone Warehouse, Charles Tyrwhitt, Clarks, Cloggs, Comet, Co-operative Travel, Crocus.co.uk, Dabs.com, Damart, 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, Home & Cook, House of Fraser, JD Sports, J D Williams, John Lewis Partnership, Ladderstore.com, Lastminute.com, LK Bennett, Lookfantastic.com, M and M Direct, Made in Sheffield, Marks & Spencer, Matalan, 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, Redfoot Revolution, Richer Sounds, Rubber Sole, 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, Vie at Home, Waitrose & Wilkinson Hardware.