Online spending shows strong annual growth in January

| Press release
Online shopping increased during January 2009 by 19%.

Latest figures from the IMRG Capgemini e-Retail Sales Index show that UK shoppers continued to spend enthusiastically online in January.  Online shoppers are still not being put off by the recession as spending in January rose by 19% compared to the previous year. This is an increase from the stable 15% growth seen throughout the second half of 2008.

Monthly growth in online spending fell for the second consecutive month, in line with the seasonal trend experienced in previous years of a January dip after the Christmas shopping surge.

Sector splits

After a strong performance over Christmas, the monthly decline was strongest in the beers, wines and spirits sector, where consumers spent 62% less than in December, as Christmas excesses were replaced by a January detox. The gifts sector also saw a marked decline in growth by 61%, showing that while consumers may have been making the most of January sales, they were purchasing personal items rather than presents.

The clothing, footwear and accessories sector, which consistently outperformed the total market and other sectors throughout 2008, also saw strong yearly growth of 32% in January. The sector also had the smallest fall in growth compared to December, reflecting the fact that it is less seasonally-volatile than other sectors.

Sector

% Change Year on Year

Total Market

19%

Beers, Wines and Spirits

13%

Clothing, Footwear and Accessories

32%

Electricals

22%

Gifts

18%

Health and Beauty

16%

Lingerie

-27%

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

“Our January results show that consumers are increasingly seeing online as the place to shop in the current environment, with year on year growth of nearly 20% for the month. Key drivers of this growth have been the electrical and clothing segments, reflecting the post Christmas sales effect on consumer spending.

So what does this mean for retailers? The strong performance of online points to a continued need to invest in the development of their e-commerce propositions. The question is whether bricks and clicks retailers can prioritise this sufficiently above the defensive strategies needed to combat tough high street trading. If not, the risk of widening the gap versus their pure play rivals will be inevitable.”

Jo Evans, Managing Director of IMRG, said:

“During these challenging economic times it is clear from the latest Index results that consumers are continuing to use the internet to their advantage. This is especially apparent when it comes to searching out the best available deals and promotions. Recent research shows that online searches for discounts have soared by over 100%, a clear indication of how consumers are becoming more price sensitive.

We continue to see a major shift in the way consumers shop as more and more are realising the benefits and savings in both time and money when shopping online. However, consumers’ higher expectations, together with more sophisticated shopping patterns, mean that retailers must both fully understand their market and customer base in order to stay ahead in this challenging climate.”

For further information please contact:

Melissa Au – 020 7025 6417 (Melissa.au@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 Experience. 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 2008 global revenues of EUR 8.7 billion and employs over 92,000 people worldwide.

More information is available at www.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 seventy e-retailers regularly contribute data to the IMRG Capgemini Index, including Airport Parking & Hotels Ltd, Adili.com, Arcadia Group, ASOS.com, BeCheeky.com, 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, Ethical Superstore, Figleaves.com, Firebox, First Choice, Furniture123, Gadgets.co.uk, Game.net, Gameplay.com, Getting Personal.co.uk, GreatValueJewellery.com, Greenfingers.com, Interflora, I Want One of Those, JD Sports, 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, Naked Wines, New Look, Next, Otto UK (Freemans, Grattan, Kaleidoscope), PetPlanet.co.uk, Pixmania, Prezzybox.com, QED-UK, QVC, R C Roland, Redcats UK, Richer Sounds, Shoe-Shop.com, Shop Direct Home Shopping, Schuh, Serenata Flowers, Tesco.com Wine, Tesco Electrical, The Fragrance Shop, The Jewellery Channel, The Sunday Times Wine Club, TUI UK, Turton Wines, Vertbaudet, Virgin Vie at Home, Waitrose, Wilkinson Hardware.