UK online sales ‘back on track’ in October with double-digit growth

UK online retail sales recovered from relatively low growth in September showing again strongdouble-digit year-on-year growth in October, boosted by the beginning of the Christmas shopping

Following disappointing sales with just 7% growth in September, which was the lowest rate since2010, IMRG revealed that British online sales “are back on track” with annual growth of 14% inOctober. In terms of monthly growth, the index increased 7%, which represents the highest growthbetween September and October for four years. Excluding travel sales, the UK online retail sectorgrew 16% year-on-year, which would result in year-to-date growth of 17%, as the IMRG and Capgemini2014 growth forecast shows.

In revenue terms, British consumers spent an estimated £8.8 billion online in October. Thee-commerce association said this is the highest market value since December 2013 and a furtherindication that the 2014 Christmas shopping period has started.

The strong October e-commerce growth in the UK was also reflected in growing mobile commerce,with sales via smartphones and tablet devices showing 43% year-on-year increase last month and 11%growth in a monthly comparison on September.

The key sectors boosting British e-commerce sales in October included clothing, with a 13.5%sales increase year on year, up from its lowest ever annual growth in September (0.3%), and theaccessories sub-sector that reached an impressive growth of 63% last month. Lingerie also delivereda similarly strong performance, with 40% growth on the same period last year.

Other sectors that performed well in October include Electricals and Beer, Wine & Spirits,with year-on-year increases of 17% and 19% respectively. Within the Home and Garden sector, salesof garden products saw an impressive 65% annual growth, the association added.

IMRG highlighted a growing disparity between the multichannel retailers, those with both aphysical and online presence, and their online-only counterparts, the so-called ‘pure players’.While the multichannel retailers showed solid 18% year-on-year growth, the pureplay merchants wereleft behind with more moderate increase of 8%.

Tina Spooner, Chief Information Officer at IMRG, commented: “The welcome return to double-digitgrowth last month follows the poor September results, when the online retail industry was adverselyaffected by the unseasonably mild autumn temperatures. We expect this solid performance to continuefor the remainder of the year.”

Looking ahead, she predicted strong online sales during the upcoming Christmas period, despiteseemingly lower consumer confidence. “E-retailers appear to be more confident in their growthpredictions for the fourth quarter, shoppers are spending more per online transaction than lastyear and our latest research reveals almost half of consumers will order gifts online less than aweek before Christmas Day.”

Alex Smith-Bingham, Head of Digital, Consumer Products and Retail, at Capgemini, concluded: “Multichannel retailers have been shifting their investments into digital strategies over the lastfew years, including sophisticated CRM platforms. This has enabled them to provide their customerswith a joined-up and integrated offering across all of their channels, something which is clearlyhaving a positive influence on sales. As we fast approach the busy Christmas period, it will beinteresting to see whether the online-only retailers, which are typically able to compete in termsof cost, will be able to close this gap.”