Shoppers head online in bid to fight the crunch

| Press release
Retail sector is still showing strong resilience, with 9% month on month growth recorded for March.
  • Online sales up by 19% compared to March last year
  • Month-on-month sales rise by 9% as online shoppers defy the recession
  • Sales of gifts rise by 18% as families splash out for Mother’s Day

Latest figures from the IMRG Capgemini e-Retail Sales Index show that the sector is still showing strong resilience, with 9% month on month growth recorded for March.  As retailers express fears of UK high streets turning into ghost towns, online continues to grow in popularity among consumers.  However, annual growth (19%) is lower than previous years, indicating that online spending is not immune to the credit crunch.

Mike Petevinos, Head of Consulting for Retail for Capgemini UK, said: “Online is proving to be a key battle ground for the retail sector during these tough times. Retailers that have developed their online offering have been able to reap the benefits of growing trade online and have also increased their influence over high street trading, as consumers turn to the internet to support their purchase decisions. The clothing, footwear and accessories sector continues to be a strong performer with 26% year on year growth.  This reflects the improved quality of the offering e-retailers are providing for this segment.”

Sector splits

The Index reveals that there is variation in the growth of individual sectors.  Gifts saw a jump in sales by 18% (month on month) as families treated mums for Mother’s Day. The Clothing, Footwear and Accessories sector continues to be the strongest performing sector with high monthly (28%) and yearly (26%) growth in March.

 

Sector 

% Change Month on Month 

% Change Year on Year 

Total Market

9%

19%

Beers, Wines and Spirits

4%

-7%

Clothing, Footwear and Accessories

28%

26%

 - Accessories

7%

87%

 - Footwear

16%

37%

Electricals

-1%

20%

Gifts

18%

118%

Health and Beauty

7%

14%

Lingerie

2%

-21%

 

Tina Spooner, Director of Information at IMRG said: “During the first quarter of 2009 the Index recorded an average year-on-year growth of 17%. This is ahead of our annual growth forecast of 15% for the e-retail market during 2009. Online retailers are clearly benefitting from the changing retail landscape and by keeping up to date with current trends, including social networking and customer reviews, they have the ability to understand and communicate with their customers and therefore succeed during the economic downturn.”

 

For further information please contact:

Melissa Au – 020 7025 6417 (melissa.au@redconsultancy.com)

Flora Hancox – 020 7025 6576 (flora.hancox@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 eighty e-retailers regularly contribute data to the IMRG Capgemini Index including:

Airport Parking & Hotels Ltd, Adili.com, Arcadia Group (Burton, Top Man, Top Shop, Dorothy Perkins, Evans, Wallis, Miss Selfridge), ASOS.com, Beautique.com, BeCheeky.com, Black Essentials, 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, Dobbies, e-flowersUK.co.uk, Ethical Superstore, Figleaves.com, Firebox, First Choice, Freemans Grattan Holdings, Furniture123, Game.net, Gameplay.com, Getting Personal.co.uk, GreatValueJewellery.com, Greenfingers.com, Home & Cook, Interflora, JD Sports, J D Williams, Jack Wills, Jason Shankey, John Lewis Partnership, La Redoute, lastminute.com, Lighting-Direct, Lookfantastic.com, M and M Direct, Made in Sheffield, Marks & Spencer, Millets, Monster Travel, Naked Wines, New Look, Next, Peacocks, Perfect Handbags, PetPlanet.co.uk, PIXmania, Prezzybox.com, QED-UK, QVC, R C Roland, Redcats UK, Redfoot Revolution, Retro36, Richer Sounds, Shoe-Shop.com, Shop Direct Home Shopping, Schuh, Serenata Flowers, Slurp.co.uk, Sunshine.co.uk, Tesco.com Wine, Tesco Electrical, The Fragrance Shop, The Health Supermarket, The Jewellery Channel, The Sunday Times Wine Club, TUI UK, Turton Wines, Vertbaudet, Virgin Vie at Home, Waitrose, Wallace Sacks, Wilkinson Hardware & Wine Hound.

 

Quotes from retailers:

Cameron McLean, PayPal’s general manager for UK merchant services, said:

“IMRG Capgemini’s March figures confirm our own experience at PayPal – Britain’s online retailers continue to enjoy business success.  For many e-retailers, the dramatic fall in the value of the pound against the euro and other major currencies represents a big export opportunity. eBay recently reported a 136% increase in exports by UK online businesses to Eurozone countries during 2008 and PayPal UK has seen a significant increase in cross border payments over the last year.”

Christian Robinson, MD of Firebox.com, said:

“Sales momentum continued in March with retail revenues growing 10% year on year. This was partly due to our most successful Mother’s Day promotion to date, which saw home and lifestyle items - such as the Slanket and Giant Cup Cake Tin - selling particularly well. New promotions and exclusive product launches also contributed to the growth.”

Zak Edwards, Managing Director of Prezzybox.com said: “Sales grew significantly in March with Prezzybox.com posting an increase of 85% on 2008’s figures. This huge growth was attributed to an aggressive marketing campaign and a greater analysis and understanding of how to increase onsite conversion rates.”

Naked Wines reveals it recruited its 10,000th customer in March, from a standing start just 3 months ago. Managing Director, Rowan Gormley, said March sales were up 61% from February.

Sales for the month of March were up 85% year-on-year for Greenfingers.com (aided in part by favourable weather conditions) and 53% for Petplanet.co.uk.  According to MD Kevin HagueBoth of our businesses are pitched very clearly at the value-for-money end of the market and we have been working hard at extending their product ranges and broadening their propositions.  We believe that the current economic climate is making consumers more price-conscious and more inclined to shop around ... and we are clearly benefitting from that trend. ”