Financial Uncertainty Slows Online Spending

| Press release
Cold weather has seen online shoppers splurge online.
  • Year-on-year growth in online spending for September slows to 14.8%
  • Third consecutive month for year-on-year growth below 20%
  • Colder weather see online shoppers splurge on new winter fashions

Figures released from the IMRG Capgemini e-Retail Sales Index today show that growth in online spending for September was only 14.8% higher than at the same point last year – this compares to 73.2% year-on-year growth for September 2007. The Index reveals that although online shopping continues to grow with consumers spending £4.8 billion online in September, this was the third consecutive month where year-on-year growth was below 20%. 

Winter fashions and Christmas shopping come early online

UK online shoppers spent 23.6% more on clothing in September compared to the previous month – taking advantage of the early winter fashion deals as the UK experienced the coldest September since 2001[1].  September also saw shoppers stocking up for Christmas, spending more online on electrical items, gifts and alcohol.

Sector

Monthly change in IMRG Capgemini Index

Total Market

+10%

Clothing, Footwear, Accessories

+24%

Electrical sector

+11%

Beers, Wines and Sprits

+7%

Gifts

+7%

Mike Petevinos, Head of Consulting for Retail at Capgemini UK, said:       

“The latest figures show that e-retail continues to see growth although at a markedly slower rate than we’ve been used to.  Whilst retailers continue to look to e-retail for growth, today’s challenging economic climate is clearly having an effect.

 What the figures do not show is how the internet is influencing consumer purchase decisions at a time where we are all seeking greater value for money.  The internet not only provides shoppers with the choice and data they need to make more informed decisions, it also provides retailers with the ability to communicate more targeted offers to consumers.  This will be critical for retailers in the run up to Christmas to get their message across as the gap between winners and losers looks set to widen.”

Jo Evans, Managing Director of IMRG commented:

“The current economic climate will prove a testing time for UK online retailers and consumers alike. For shoppers looking to make the most out of their squeezed spending resources, buying online gives them the opportunity to find and compare products and prices easily and efficiently. Online retailers will need to ensure that they are prepared and ready to meet their customers’ requirements by providing good product display and availability, with easy to follow payment and delivery information, in order to make the most of the current situation.”

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.

Around sixty 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, Blacks, Boden.co.uk, Boots Direct, Brora, Buyagift.com, Carphone Warehouse, Charles Tyrwhitt, Cloggs, Comet, Co-operative Travel, Crocus.co.uk, Dabs.com, Damart, Daxon, Debenhams, e-flowersUK.co.uk, EmpireDirect, Figleaves.com, Firebox, Furniture123, Gadgets.co.uk, Game.net, GreatValueJewellery.com, Greenfingers.com, Interflora, I Want One of Those, J D Williams, Jason Shankey, John Lewis Partnership, La Redoute, lastminute.com, Lighting-Direct, Lookfantastic.com, M and M Direct, Made in Sheffield, Marks & Spencer, Millets, 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 Fragrance Shop, The Jewellery Channel, The Sunday Times Wine Club, TUI UK, United Co-op, Vertbaudet, Waitrose,  Wilkinson Hardware.

Quotes from retailers:

Shop Direct Home Shopping Group Chief Executive, Mark Newton-Jones said:

“Our clothing sales are in line with IMRG’s figures and are supported by demand for our women’s own design branded products such as Definitions.”

Kevin Hague, MD of Internet Retailer M8 Group comments:

“Online-only retailers are able to react more quickly to market conditions than ‘bricks-and-clicks’ players; and the underlying economics of the online-only business model enable us to offer a superior value proposition. In the current climate we see customers being more diligent in searching out value; this makes them more likely to look beyond the known ‘bricks-and-clicks’ players and seek out specialists like ourselves.”

Zak Edwards, Managing Director of Prezzybox.com said:

“September was a fantastic month with Prezzybox.com showing a like-for-like growth on orders of 43%. It would appear that Christmas, once again, is kicking in earlier.”

Alison Wade, Head of Marketing at Buyagift, said:

“Orders at Buyagift increased by a massive 43% on 2007’s figures and turnover improved by 30%. Now that Christmas is almost upon us, we can feel very confident that our busiest time of the year should bring excellent results.”

Press contacts:

Tom Barton

Capgemini UK plc

Tel.:+44 (0)870 238 2491

Email: tom.barton@capgemini.co.uk


 

[1] Met Office review of weather for September 2008; http://www.metoffice.gov.uk/climate/uk/2 008/september.html