Online retail strengthens amid high street struggles

Online retail strengthens amid high street struggles

Online retail sales in the UK increased by 18.8% year on year in April, despite high street struggles and an early Easter.

According to the latest figures from the IMRG Capgemini e-Retail Sales Index, this was the highest year-on-year rise since November 2016.

There was a fall in the overall market conversion rate (down 4.15% from 4.3% YoY) marking the fifth consecutive decline this year. This is likely to be due to the increasing penetration of sales made through smartphones, which have lower conversion rates generally. Meanwhile, average basket values (ABV) increased jumping 14 pounds (month on month) to £117.12 for multichannel retailers, and by 3.5 pounds to £87.16 for online-only.

Strategy and insight director for IMRG, Andy Mulcahy, shares: “Growth in online retail sales revenue has been markedly higher than expected throughout 2018 so far. One reason is likely to be related to a turnaround in economic fortunes – while inflation outstripped wage growth for most of 2017, the gap has closed in recent months and wage growth was actually higher than inflation in March 2018. This means that, on the whole, UK shoppers should be feeling a bit more confident in making purchases. This is reflected in the data we are tracking – if we look at the last six months (Jul-Dec) of 2017, online retail sales growth was +12.2%. The first four months of 2018 has come in at +16.2%.

“What has been very apparent is that it is online retail that is benefiting, while the high street is facing a sustained downturn. Up until now, there have been multiple reasons to suspect that this split in performance may have been influenced by various external – and therefore temporary – factors; the above-average rainfall in January, the snow in February / March, Easter being early this year. The fact that April 2018 is comparing against an April last year that included Easter – with the boost to retail that it typically brings – suggests that this is not a blip. As shoppers have started to find themselves with a bit more disposable income in 2018, we are possibly witnessing an acceleration in the shift of shopper behaviour over to online.”

He concludes: “Much of the coverage of the downturn on the high street sees it as a negative development – but actually shoppers are still shopping as much as they did before, it’s not retail that is suffering; it’s just undergoing a digital transition at a far faster pace than was previously the case.”

Disclaimer: This information has been collected through secondary research and TJM Media Pvt Ltd. is not responsible for any errors in the same.