July online spending hits £5 billion with highest growth since ‘07

| Press release
Results from the IMRG Capgemini e-Retail Sales Index reveal an 18% highest yearly growth in month of July since 2007

The latest results from the IMRG Capgemini e-Retail Sales Index reveal that shoppers spent £5 billion online in July, the most in any month this year. With Brits spending an average of £811 per person, online retail has shown a marked turning point since the lows of the last two years with consistently high growth levels throughout the first half of 2010.

The Index has grown by 18% compared to last July, in the biggest annual jump for the month of July since before the recession in 2007. As retailer promotions drew shoppers online, an impressive growth rate of 14% was recorded compared to June – the highest monthly growth of 2010 so far.

A true British summer materialised in late July, with over twice the average rainfall for the time of year recorded2.  Growth in travel sales rose by a third as a result, with Brits escaping the drizzle in favour of last minute deals in hotter climes. The travel sector grew by a greater amount compared to June than any other sector analysed in the Index, as consumers took advantage of heavy discounting by travel companies to book last minute holidays.

Alcohol sales took a knock after the highs of the start of the international sports season in May and June, and perhaps after England’s disappointing performance in the World Cup. Sales of beers, wines and spirits online fell by a tenth compared to the previous month.

Chris Webster, Vice President, Head of Retail Consulting and Technology, Capgemini, said: “Although online retail sales survived the recession more convincingly than high street  sales, the last two years or so have no doubt been shaky at times. It is really encouraging to see growth levels returning to those seen pre-2007 and before consumer confidence was knocked by the financial crisis and recession.

The stand-out result this month came from the travel sector, which was boosted by shoppers taking  advantage of last minute deals to escape the disappointing summer.”

David Smith, Managing Director of IMRG said: “With over half of the UK population online at least once a day3 it is no surprise that online sales continue to grow impressively year on year. The evidence mounts that high street retailers will need to invest more in their online business and put it at the heart of their retail strategy. Online retailers, on the other hand, will need to continue to innovate as they strive to close the growth gap.”

The performance of retailers with a high street and an online presence continues to outshine that of online only retailers. Multichannel retailers witnessed growth of 18% compared to last month, while online only (‘pureplay’) retailers showed month on month growth of only 8%. Multichannel retailers are also managing to convert more browsers into actual sales, with an average conversion rate of 4.49%, compared 4.35% for online only retailers. 
Industry quotes:

Mark Lewis, Chief Executive of Collect+, says:
“Online continues to be the destination of choice for savvy shoppers who know where to get the best deal. Multichannel retailers seem to be making more of this opportunity at the moment, with sales growing by 18% in July. Part of the advantage that multichannel retailers have is in being able to offer a range of delivery options, such as ‘click and collect’ services. Choice and flexibility are key for retailers to ensure that they maintain brand loyalty and differentiate themselves from competitors. So, despite the upturn, retailers cannot rest on their laurels, and must continue to adapt to offer services that fit in with busy consumer lives.”

Christian Robinson, Managing Director at Firebox.com, comments: “Firebox achieved record turnover again for July with order volumes up 52% year on year. Hit products included Silly Bandz - the smash hit silicone shapes that can be worn as funky bracelets or used as rubber bands – which sold in their thousands. Demand was so high we actually struggled to keep them in stock during the month and they remained our number one seller (by volume) throughout the month. It’s exciting to see such a significant jump in sales during the summer, before the super busy Christmas period begins.”

David Stratton, Head of Partnerships at HolidayExtras.com comments: “July was a month of positive growth, with parking bookings up by seven per cent; hotels up by four per cent and overall growth of five per cent. These figures, while in line with our forecast, are behind our yearly budgeted expectations due to the volcano activity in April. We are delighted to be in a positive growth situation, particularly in the current economic climate. This is due to the savings that we offer our budget-conscious holiday travellers and our focus on customer support. August to date has seen record booking days.”
For further information please contact:
Flora Hancox – 020 7025 6576 (flora.hancox@redconsultancy.com)

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 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.

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), Ascension (formerly Adili.com), ASOS.com, Beautique.com, BeCheeky.com, Binends.com, Black Essentials, 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, Daxon, Debenhams, Dobbies, e-flowersUK.co.uk, Ethical Superstore, Faith Shoes, 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, Interflora, 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, Naked Wines, NaturalCollection.com, New Look, Next, Peacocks, Perfect Handbags, PetPlanet.co.uk, PIXmania, Prezzybox.com, QED-UK, QVC, R C Roland, Redcats UK, Redfoot Revolution, Richer Sounds, Rubber Sole, Sainsbury’s, Scales Express, Shoe-Shop.com, Shop Direct Home Shopping, Schuh, Serenata Flowers, Shedstore, Shudoo, Slurp.co.uk, SockShop, Sofa and Home, Sunshine.co.uk, Tesco.com, Tesco Electrical, The Fragrance Shop, The Health Supermarket, The Natural Store, The Present Room, The White Company, TUI UK, Turton Wines, Vertbaudet, Vie at Home, Waitrose, Wallace Sacks, Wilkinson Hardware and Winedirect.co.uk.

 

1Calculation by 50 billion, divided by 61,414,062 (www.google.com/publicdata)

2http://news.bbc.co.uk/weather/hi/uk_rev iews/newsid_8882000/8882153.stm

3The IMRG/BPS Online Access Survey – Q2 2010