Online Summer Spending Proves Robust As Summer Fashion Sales Rise

| Press release
Online spending rose, however electrical and alcohol sales are hit following disappointment in FA Cup and Euro 2008
  • Online shoe sales surge 17% ahead of Sex and the City premiere
  • FA Cup and Euro 2008 disappointment hits electrical and alcohol sales
  • Month-on-month growth slows by 1.6% in line with seasonal variation

Online spending in May rose to over £4.5 billion according to figures released today by Capgemini and IMRG in their monthly IMRG Capgemini e-Retail Sales Index.  Online spending in May was robust, despite a small seasonal decline in the rate of growth, seeing £4.5 billion spent online – an increase of 1.6% on April.  An equivalent of £731 was spent online for every person in the UK in May – a year-on-year increase of 30%.

Summer wardrobes

Growth in May was confined to the online clothing, footwear and accessories sector which rose 4% on the strength of summer clothing sales.  Elsewhere, sales fell by 10% in the electrical sector and UK shoppers also cut back their online spending on alcohol by 11%. 

Sex and the City

In addition, shoppers updated their wardrobes in light of the recent warmer weather in the UK and a surge in online footwear sales of 17% is attributed to the May premiere of the Sex and the City movie.

IMRG Capgemini e-Retail Sales Index

Anthoula Madden, Vice President at Capgemini UK’s Consumer Products and Retail Team said:       

“Although online sales across the board are more robust than on the high street, falling property prices and persistent news of a credit crunch are causing UK shoppers to become more careful with their disposable income.

The premiere of Sex and the City provided an excellent platform for e-retailers to capitalise on consumer spending, but elsewhere the lack of any of the big four clubs in the FA Cup final and the absence of a home team in Euro 2008 seems to have hit hopes of the sales of large screen TVs and alcohol.

The pressure that the current economic climate is placing on retailers is a reminder that e- retailers must become ever more innovative in attracting new customers by providing a truly integrated multi-channel offering to maintain existing customers.”

Jo Evans, MD of IMRG, commented:

“Increasingly when you talk to people, internet shopping is just their normal way of doing things and buying stuff.  Shopping search is now so good that it reliably finds everything that’s out there and available to buy - whatever they are looking for they can find - which is more than can be said for the hit and miss experience of trying to find stuff in a physical store. Millions of us just never think of going out to see what might or might not be in the shops anymore, and for many young people, they wouldn’t even know how to - to them it’s the high street that is the alien shopping environment, the internet is all they know. ”

ENDS

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 Experience - and through a global delivery model called Rightshore®, which aims to offer the right resources in the right location at competitive cost. Present in 36 countries, Capgemini reported 2007 global revenues of EUR 8.7 billion and employs over 83,000 people worldwide.

More information is available at www.uk.capgemini.com.

About the ‘IMRG Capgemini e-Retail Sales Index’

The IMRG Capgemini Index 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.

Approximately 60 e-retailers regularly contribute data to the IMRG Capgemini Index, including;

247 Electrical, Airport Parking & Hotels Ltd, Ancestral Collections, Arcadia Group, ASOS.com, BeCheeky.com, Berry Bros. & Rudd, Boden.co.uk, Boots Direct, Buyagift.com, Carphone Warehouse, Charles Tyrwhitt, Cloggs, Comet, Co-operative Travel, Crocus.co.uk, dabs.com, Daxon, Debenhams, e flowersUK.co.uk, EmpireDirect, Figleaves.com, Firebox, Furniture123, Game.net, GreatValueJewellery.com, Greenfingers.com, Interflora, I Want One of Those, J D Williams, Jason Shankey, John Lewis Department Stores, La Redoute, lastminute.com, Lighting-Direct, Lookfantastic.com, Made in Sheffield, Marks & Spencer, New Look, Next, Otto UK (Freemans, Grattan, Kaleidoscope), PetPlanet.co.uk, Pixmania, Prezzybox.com, QED-UK, QVC, R C Roland, Redcats UK, Shoe-Shop.com, Shop Direct Home Shopping, Schuh, Skinstore.com, Tesco.com Wine, Tesco Electrical, The Jewellery Channel, The Sunday Times Wine Club, TUI UK, United Co-op, Vertbaudet, Waitrose,  Wilkinson Hardware

Quotes from retailers:

Bruce Fair, MD of Kelkoo.co.uk said of the latest findings:

“Lots of people expected a fall in large television sales as a result of Euro 2008, which has materialised.  We’ve also seen the price of large TVs decrease by around 40% over the last 12 months, with savings of well over £250 on a typical LCD TV2.  Online fashion and clothing sales have been steadily rising for some time as people try things on at the weekend and buy online during the week. It is also testament to the improved levels of service that web shops are offering and the fact that major fashion retailers are investing in their online properties.”

2Philips 32 PFL 5522 (32’ LCD TV)

David Walmsley, Head of Web Selling, John Lewis Direct said:

“Trading continues to be challenging but Johnlewis.com saw good sales on electricals and consumer electronics through May, with new lines such as John Lewis’ own-brand “Collection” large kitchen appliances continuing to appeal to our customers.”

Jason Shankey, Managing Director of JasonShankey.co.uk said:

“We’re continuing to see the effect of the economic slowdown on the sales of luxury hair and skincare products. Whilst we haven’t seen much of a downturn in the sale of smaller items, the sales of luxury items costing £100 upward have been severely impacted. It’s evident that customers have been tightening their belts and choosing to purchase only items that they need, as opposed to items that they want.”

Anna Bacon, Head of Marketing at Lookfantastic.com said:

“Since launching our new site in November 2007 we have seen a marked increase in year-on-year sales each month. Despite the current climate, we have not seen a decline in sales.”

Alison Lancaster, Marketing Director at Charles Tyrwhitt commented:

“We are delighted our web sales continue to show positive double-digit like-for-like growth in today’s challenging market. For the month of May 2008, web sales at ctshirts.co.uk grew by 10.8% against the same period last year across our 3 key markets – UK, USA and Germany.”