Consumers in the UK shopped heavily on the internet for Christmas presents and other goods andservices in December, according to e-commerce association IMRG which is predicting further strong
growth this year.The latest figures from the IMRG Capgemini e-Retail Sales Index revealed that shoppers in theUK spent a total of £7.9 billion online during December, equivalent to £155 per person. Sales wereup by 12.2 per cent on November and by 16.5 per cent on December 2010, with the Index valuereaching a record high. A total of £68 billion was spent online in 2011, which resulted in theIndex increasing by 16 per cent.
For 2012, IMRG and Capgemini predict the Index will record a further 13 per cent growth, withtotal e-retail sales estimated to be worth £77 billion by year end. Around one hundred UKe-retailers now regularly contribute data to the IMRG Capgemini Index.
The December figures show that online retailers had a successful Christmas, mirroring thehigh street success reported by the British Retail Consortium of 2.2 per cent growth. IMRG saide-retail now accounts for 17 per cent of the total UK retail market and is likely to increase withthe rise of mobile commerce and the huge numbers of tablet computers sold last year.
Chris Webster, head of retail consulting and technology at Capgemini, said: “Strong onlinesales over Christmas were even more impressive since they built on a 25 per cent year on yeargrowth from 2009 to 2010. During 2011 we saw continued pressure on sales as shoppers became savvierin looking for bargains and this continued in the run up to Christmas.”
Looking ahead, he added: “The rapid rise of mobile in 2011 will continue into 2012 asconsumers became familiar with shopping via tablet devices and smartphones, some taking advantageof their recent Christmas presents. This changing landscape will open up a myriad of opportunityfor retailers including the integration of stores into the multi-channel world and the potential ofnew capabilities like location-based marketing services.”
The Christmas sales and 16.5 per cent year-on-year growth on December 2010 represents astrong recovery on the 11.2 per cent year-on-year growth reported in November. It is still belowthe growth levels seen 12 months ago (25 per cent year-on-year growth December 2009 – December2010), but demonstrates that the online market still offers a very positive growth opportunity.That said, the average growth rate throughout the first half of 2011 was in the high teens, butdropped to the low teens in during the second half. This slowdown is due to sales in the travelsector slipping as well as a disappointing second half for the clothing sector which saw a declinein year-on-year growth from 40 per cent in December 2010 to just 12 per cent in December 2011.
Furthermore, a number of well-known fashion brands at the mid- to low-end of the marketreported poor sales in their recent trading statements while luxury brands are turning hugeprofits. This is partly due to the spending power of middle-income Britons being squeezed by risinginflation and low wage increases while high net worth individuals continue to earn and spend.
Online-only/ catalogue retailers are gaining ground in year-on-year growth as high street /multichannel experienced a decline in the second half of 2011, dropping from 25 per cent to 14 percent growth. In comparison, online-only retailers’ sales rose from 11 per cent in the first half of2011 to 13 per cent in the second half, reflecting a flight toward lowest cost options in contrastto previous preferences for the ease and familiarity of a high street brand.
James Roper, CEO of IMRG, said: “The December results are incredibly impressive as the growthfor the same period in 2010 was 25 per cent, meaning it had to climb from a very high base. Despitethe fact that consumers are finding themselves with less and less disposable income, the e-retailmarket keeps defying the general retail trend to record double-digit growth. Online is such anintegral part of the shopping experience now that it generally plays at least some part in mostpurchases, whether through research and comparison or social media and product reviews.
“We are forecasting growth of 13 per cent moving into 2012, lower than our estimate for 2011but it would still be an extremely positive performance given the economic climate and the factthat the online market has reached a degree of maturity now, meaning it can offer a really keycontribution to help drive the economic recovery.”
British business managers supported the survey’s findings. Jonathon Brown, Head of Online atJohn Lewis, for example, commented: “December was a great month for johnlewis.com and online salesfor the five weeks to 31 December 2011 were 29.7 per cent across the site.”
Russ Carroll, UK MD of Shopping.com, added: “The Christmas rush came later this year, partlydue to the fact that retailers offered delivery as late as two days before Christmas Day. It’slikely the recession also played a part as consumers held out for the sales in a bid to find thebest bargains. Clothing experienced consistent e-retail growth in 2011 and this is something weexpect to see continue well into 2012.”
