Lowest ever growth for clothing as April showers dampen desire for summer wares

| Press release
e-Retail still maintains double-digit April growth
  • Shoppers in the UK spent £5.7 billion online in April; equates to a year-on-year increase of 10% 
  • M-commerce continues extraordinary year-on-year growth at 353%
  • Travel sector sees 20% year-on-year growth as wet weather prompts Brits to search for dryer climes
  • Electrical sector sees 26% year-on-year boost as shoppers rush to get hands on iPad3

UK shoppers spent an estimated £5.7 billion online in April, a year-on-year growth of 10% and equivalent to £1121 per person, according to the latest figures from the IMRG Capgemini e-Retail Sales Index. Although this growth level comes in lower than IMRG and Capgemini’s 13% estimate for the year, April 2011 was a strong performing month, boosted by the Royal Wedding, with the market recording 19% growth and beer, wine and spirits up 55%.

While the market managed double-digit growth, the wettest April2 on record clearly impacted upon consumers’ desires to update their summer wardrobes as the clothing sector recorded growth of just 1%, the lowest in the 11 years it has been tracked in the Index. This is some contrast with April 2011, which was the warmest April since 19103. The soggy weather did however have a positive impact on the travel sector, which saw sales jump 20% year-on-year, as Brits flocked online to search for dryer destinations.

As more and more retailers offer mobile-optimised websites to attract busy shoppers with easy and fast browsing/ordering, payment and delivery options, the number of Brits converting to mobile transactions increases. As a visible outcome of this developing consumer trend, m-commerce in April registered a huge spike of 353% year-on-year4

The average conversion rate of m-commerce has been improving as well. The conversion rate for m-retail in April (those shoppers that visit a retail site via a mobile device and make a purchase from it) was only 2.4% lower than the e-retail conversion rate, at 1.3% , compared with 0.8% in April last year. This suggests that shoppers who would previously only browse mobile stores to check for bargains and compare prices , are now actually also making purchases via the channel.

The launch of the iPad3 at the end of March played a very positive role in helping the electrical sector reach a year-on-year growth of 26%, the highest since August 2010.

IMRG Capgemini eRetail Figures in April

Chris Webster, Head of Retail and Technology at Capgemini, said: “April was another month to maintain pace for online retail with sales growing 10% on the same month last year, despite the dampening effects of a wet and chilly weather. Consumers continue their steady march to migrate their purchases online which means that the high street suffers the brunt of a slackening economy. Mobile commerce continues to surge ahead as the latest shopping trend of customers on the go. It would be a good strategic move for multichannel retailers to power ahead with m-commerce and include it in their portfolio.”

Tina Spooner, Chief Information Officer at IMRG, commented:  “While the 10% annual growth recorded in April is lower than the 13% uplift seen in the first quarter, it should be noted that this is on the back of a strong performance in April last year when online retail sales were up 19% year-on-year.

“The slowdown in sales of clothing over recent months may be an indication that this sector is showing signs of reaching maturity. Year-to-date sales of clothing are up 10% year-on-year, compared with 28% annual growth recorded in the period January to April last year.  On a more positive note, sales of electricals were at their strongest level in over 18 months, no doubt boosted by sales of the recently launched iPad 3.”

Industry Quotes

Jonathon Brown, Head of Online Selling at John Lewis said: “Johnlewis.com had a tremendous April which continues our outperformance in 2012 as we see customers coming in volume to browse and buy through our website and our omni channel customer offer. We also saw new heights of customer satisfaction through the site as we continue to focus on driving the everyday basics as well as delighting our customers with newness.

“Overall our sales leapt forward on the year by over +50% with all online categories outperforming last year by some distance. Our electricals business was boosted by sales of newness as well as resurgent vision sales boosted by digital switchover in the south. These and other outstanding performances across the directorate mean our electricals business moved forward by over +80% on 2011, a truly phenomenal performance.

“Fashion was also in fine form despite the challenging weather impacting some areas, as it came in almost +40% on 2011 with strong sales in womenswear, especially our extended beauty assortment, lingerie and our flagship SoR brands. Home came in with sales over +25% on the year with strength across the directorate but notable performances from our core assortments of bed linens and bathshop, as well as indoor furniture..

“So a cracking month and one that sets new standards for John Lewis online, illustrating how we are continuing to satisfy our customers’ needs and reach new customers through the continued extension of our online ranges, focus on service and convenience. April was a continued great performance for 2012 and we are confident this will remain going forward.”

Ryan Kemp, Head of Merchant Services UK for Shopping.com, comments: “The growing penetration of smartphones and tablets - which topped the wish list for shoppers on the Shopping.com network for the third month in a row in April – means the number of sales made via mobile devices is growing very rapidly. Shoppers are always in search of the best deal and will not only buy on the move to snap up a bargain, but will even compare prices on their phones while out on the high street. As the year progresses we expect to see a lot more brands include m-commerce offerings in their mix.”

Chris Clarkson, Managing Director of Sunshine.co.uk comments: “We are certainly seeing the benefit of a wet April and our own sales data shows us that Brits appear to be ignoring adverts for a no-doubt rain-soaked summer in the UK and are instead looking to head away from all of the economic doom and gloom of the UK to seek out a warmer and more upbeat climate. Our forecasts show that sales will continue to climb, probably peaking just before the Olympics as Brits try and avoid the traffic congestion and increased prices that the games will bring.
“We’re looking forward to a very bright year; not just because sales are looking more positive, but also because that’s obviously a sign that more families are getting their annual holiday again
.”

Andrew Tse, Managing Director at Purely Gadgets said: “April saw retail sales grow by double digits year on year since April 2011. A good trading month in March was followed by a strong April year on year performance and the launch of our products on the Tesco revamped website.” 

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 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
Over a hundred e-retailers regularly contribute 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, Figleaves.com, 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 Health Supermarket, The Mat Factory, The Natural Skincare Co, The Natural Store, The White Company, TUI UK, Turton Wines, Waitrose, Warehouse, Wilkinson Hardware & Wynsors World of Shoes.

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1 £5.8bn divided by the estimated number of UK adults 50.9m
2 http://www.bbc.co.uk/news/uk-17897982
3 http://news.bbc.co.uk/weather/hi/uk_revi ews/newsid_9475000/9475206.stm
4 All m-commerce data is drawn from the m-Retail Sales Index, which runs in parallel with the main Index