Online shopping reaches highest growth rate in two years

| Press release
The latest figures from the IMRG Capgemini e-Retail Sales Index show that total sales online increased by 22% in May, the highest growth rate since two years.

  • Total of £4.5 billion spent online during May
  • Online retail market up 22% on May 2009
  • Shoppers stock up on alcohol ahead of World Cup; 23% increase in sales of beer, wines and spirits

The latest results from the IMRG Capgemini e-Retail Sales Index show that total sales online increased by 22% in May compared to last year in the highest growth since June 2008. Sales were boosted by warm weather and the bank holiday weekends.

Shoppers spent £4.5 billion online during the month, equivalent to £73 for every person in the UK. The Index shows a 3% increase in sales in May compared to April this year.

There was a 23% increase in alcohol sales compared to last year as shoppers stocked up on booze ahead of the World Cup. This was fuelled by discounted prices being offered by many retailers. Sales of electrical goods also jumped by 13%, perhaps an indication of the surge in flat screen TVs being sold to coincide with the tournament.

Sales of clothes online rose considerably in May, with a 32% increase compared to last year, in line with the warmer temperatures as well as the World Cup fuelling sales of sportswear ahead of the big England matches.

Sector

% Change Year on Year (Apr 09 – Apr 10)

% Change Month on Month (Mar 10 – Apr 10)

Total Market

22%

3%

Beers, Wines and Spirits

23%

29%

Clothing, Footwear and Accessories

32%

5%

- Accessories

69%

15%

- Footwear

52%

6%

- Lingerie

9%

13%

Electricals

13%

8%

Gifts

12%

24%

Health and Beauty

6%

5%

Travel

9%

1%

Home & Garden

41%

7%

Chris Webster, Vice President, Retail Consulting and Technology, Capgemini, said: “Throughout the history of the Index, we have seen a noticeable rise in sales of certain goods whenever there is a major sports tournament on. This year’s World Cup is no exception, with online retail as a whole growing by the highest level in two years, and sectors such as clothing, alcohol and electricals rising especially rapidly. It’s good to see that consumers’ spirits haven’t been dampened by concerns over government spending cuts, and savvy retailers will have embraced the opportunity to draw in new customers with marketing and price incentives.”

Tina Spooner, Director of Information at IMRG said: “With online sales growing at their highest rate in almost two years, this is good news for the e-retail industry. The fine weather in late May, together with the build up for the World Cup appears to have had a positive impact for e-retailers.”

“Year to date, the UK e-retail market has grown 14%, which is in line with our predictions for this year. With recent research suggesting that over half of consumers believe the economy is now recovering from the recession, it is evident that e-retailers have already started to benefit from an increase in consumer spending.”

May 2010 also proved to be a successful month in terms of growth of conversion rates, with multichannel retailers converting 16% more browsers to purchasers compared to last year and like for like conversion rates for online only retailers growing by 10% year on year.

Growth in sales by retailers with a high street offering as well as an online presence continues to outstrip that of online only retailers. Multichannel retailers witnessed growth of 30% compared to last year, while online only (‘pureplay’) retailers showed year on year like for like growth of 11%.

Industry quotes:

Bruce Fair, Managing Director of Kelkoo UK, commented: “The World Cup is not just a lucrative event for pubs and bars, these new figures clearly show that online retailers are reaping the benefits as well. Pre-planned spend on television upgrades and sportswear have undoubtedly benefited from the excitement that built before the World Cup kicked off and our own research data supports a continued healthy outlook for online shopping as England progresses through the competition. A recent Kelkoo report reveals that online spending is expected to hit £116 million by the end of stage two, rising to £205 million if England reaches the finals - representing 10.2% of total World Cup retail spending.”

Mark Lewis, Chief Executive of Collect+, added: “Summer weather and World Cup frenzy have led to a surge in online deliveries of clothes and electrical goods. Consumers know they can often get the best deals online, and retailers that offer choice, flexibility and clear and simple services will have won that battle for the custom and loyalty of internet shoppers. A recent Collect+ report found that poor returns experiences alone have caused more than half of us to shun a particular retail outlet. So, despite the upturn, retailers cannot rest on their laurels, and must continue to adapt to offer services that fit in with busy consumer lives.”

Cameron McLean, general manager for merchant services at PayPal UK, said: “PayPal’s own research shows that consumer spending online has increased over the last few months. In the run up to the World Cup it is not surprising that electricals is one of the biggest growing sectors for the month, with more people spending money on LED and plasma screen TVs. More generally we have seen that consumer confidence has been growing, with PayPal research showing that 43 per cent of shoppers have increased the quality or quantity of what they’ve bought over the last 6 months. Young people in particular have increased their online spend with 37 per cent treating themselves more now than 6 months ago. Overall it proves that online sales are going to be crucial for the retail sector as it emerges from the recession and returns to growth.”

Dr Jeremy Howard, Executive Chairman at Slurp.co.uk, said: “At Slurp.co.uk we saw another dramatic year on year increase in sales in May 2010. The warmer weather saw a pick up in the usual summer favourites of rosé wines and sparklers. We also expanded our range of specialist beers in May and those made a material contribution to sales. There was undoubtedly some stocking up ahead of the World Cup. But overall our sense is the market for wines and spirits continues to migrate online at a fast pace. We are winning more market share as a result of our aggressive e-marketing campaigns and steadily improving brand awareness.”

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 ExperienceTM. 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 2009 global revenues of EUR 8.4 billion and employs 90,000 people worldwide.

More information is available at /.

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.

Over one hundred e-retailers now regularly contribute data to the IMRG Capgemini Index, including Airport Parking & Hotels Ltd, Amara, Arcadia Group (Burton, Top Man, Top Shop, Dorothy Perkins, Evans, Wallis, Miss Selfridge), Ascension (formerly Adili.com), ASOS.com, Beautique.com, BeCheeky.com, Binends.com, Black Essentials, Blacks, Boden.co.uk, Boohoo.com, Boots Direct, Brora, Buyagift.com, BuyItDirect.co.uk, Carphone Warehouse, Charles Tyrwhitt, Clarks, Cloggs, Comet, Co-operative Travel, Crocus.co.uk, Dabs.com, Damart, Daxon, Debenhams, Dobbies, e-flowersUK.co.uk, Ethical Superstore, Faith Shoes, Figleaves.com, Firebox, First Choice, Freemans Grattan Holdings, Furniture123, Game, Gameplay, Gamestation, Getting Personal.co.uk, GreatValueJewellery.com, Greenfingers.com, Holiday Extras, Home & Cook, House of Fraser, Interflora, JD Sports, J D Williams, Jack Wills, Jason Shankey, John Lewis Partnership, Ladderstore.com, La Redoute, Lastminute.com, Lighting-Direct, LK Bennett, Lookfantastic.com, M and M Direct, Made in Sheffield, Marks & Spencer, Millets, Monster Travel, Musto, Naked Wines, NaturalCollection.com, New Look, Next, Peacocks, Perfect Handbags, PetPlanet.co.uk, PIXmania, Prezzybox.com, QED-UK, QVC, R C Roland, Redcats UK, Redfoot Revolution, Richer Sounds, Rubber Sole, Sainsbury’s, Scales Express, Shoe-Shop.com, Shop Direct Home Shopping, Schuh, Serenata Flowers, Shedstore, Shudoo, Slurp.co.uk, SockShop, Sofa and Home, Sunshine.co.uk, Tesco.com, Tesco Electrical, The Fragrance Shop, The Health Supermarket, The Natural Store, The Present Room, The White Company, TUI UK, Turton Wines, Vertbaudet, Vie at Home, Waitrose, Wallace Sacks, Wilkinson Hardware and Winedirect.co.uk.

Rightshore® is a trademark belonging to Capgemini

For further information please contact:
Flora Hancox – 020 7025 6576 (flora.hancox@redconsultancy.com)