Online shoppers looking for cheaper treats

by | Oct 19, 2011 | Business Approaches & Methods

Online shopping trends

The latest figures from the IMRG Capgemini e-Retail Sales Index have revealed a solid performance in the online sales market for September, with the Index climbing 15% year-on-year (YOY) and equating to £5.5bn spent online. If the travel sector is excluded, the Index grew at 20% YOY. The strength of these results is highlighted even further when compared with the UK high-street, which according to the latest British Retail Consortium sales monitor, grew just 0.3 per cent throughout last year.

This post originally appeared at 21webmerceblog » Peter Horsten.View original post.

Online commerce growth slowing down

Despite the good performance last month, IMRG and Capgemini have reviewed their original prediction of 18% annual growth for 2011, and downgraded it to 16% – equating to a 12-14% increase for the fourth quarter. Although this is still strong, it does show that the rate of growth is slowing down.

  • September e-Retail sales up 15% over September 2010; up 6% month-on-month
  • £5.5bn spent online; £47bn spent online in 2011 to date
  • Revised Index growth forecast for 2011: 16% increase on 2010, down from 18%
  • Travel sector records lowest quarterly growth since January 2009

The consumer invests in smaller things and home improvement

The sectors that have performed particularly well during September include clothing, home and garden, and alcohol. Clothing jumped 21% YOY, alcohol 16% YOY, and for the second month in a row, home and garden saw a huge YOY growth of 40%.

“Faced with uncertainty, shoppers are prepared to cut back on luxuries, but not on shopping altogether. Smaller items, such as clothing and items for home, are considered rewards for our belt tightening, or just more sensible purchases.” (Chris Webster, head of retail consulting and technology at Capgemini)

Falls for electrical and travel

The quarterly results show similar disparity between the ‘low-ticket’ and ‘big-ticket’ items and reveal some interesting trends. Clothing sales have remained consistently strong. Sales in lingerie have also seen steady quarterly growth this year. In contrast, the more expensive sectors have been suffering, such as electrical, which has slowed dramatically in the last two quarters, from 18% YOY in Q1, to 8% YOY Q2 and just 2% YOY in Q3. The travel sector has suffered the most thus far in 2011, with Q3 sales up just 2% YOY, the lowest quarterly growth since January 2009.

“The tough times for the travel sector are showing little sign of improving any time soon, with consumers focusing on home improvements rather than going on holiday. This is borne out by the strong yearly growth in the home and garden sector, the second consecutive month that it has recorded a rise of 40%. It is clear that both the stagnation in the housing market and the continuing uncertainty over the economic recovery are influencing consumer behaviour in the online market.” (David J Smith, Chief Marketing & Communications Officer at IMRG)

The table below shows the MOM and YOY results for all sectors.

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