UK online retail sales posted the weakest year-on-year growth in August in 15 years, partly due to low growth recorded across a number of sectors, including clothing, figures from the national e-commerce association, IMRG, have shown.
Last month, e-retail sales growth in the UK reached only 5% year-on-year, in contrast to a particularly strong August 2014 with 18% growth, according to the latest IMRG Capgemini e-Retail Sales Index. It is the weakest performance in August since the launch of the Index in 2000. In a monthly comparison with July, online sales were also down 6% last month.
IMRG said that the weak result is “potentially the result of a later Bank Holiday (which will be included in the September Index results this year) and a delay in back-to-school shopping”. The association stressed, however, that the Index has seen a solid year-to-date increase of 10%, despite this dip.
In terms of growth in the individual product groups, the clothing sector recorded annual growth of just 5% last month, its lowest-ever performance in August. The low single-digit growth follows double-digit growth in June (18%) and July (14%).
Accessories, which is traditionally one of the more robust and stable sectors, saw an increase of just 14% last month, its lowest increase since August 2009. Sales of electrical items continued their limited growth – whilst August saw an increase of 6% on July, they recorded a 1% drop on the same period last year, the weakest year-on-year performance in 2015. However, there were more positive figures recorded in the health & beauty, gifts and home sectors, which were up 30%, 23% and 31% year-on-year, respectively.
The m-commerce sector, which comprises sales via smartphones or tablet devices, continued to grow strongly, increasing 33% in August, but the growth was slightly weaker compared to 42% recorded in July. The Index revealed an emerging trend with regard to the split of mobile device used for making online sales. In 2014, smartphones accounted for 20% of m-retail sales, compared to 80% made via a tablet device. In 2015, the balance has shifted, with 28% of sales made via a smartphone, compared to 72% made on a tablet.
Alex Smith-Bingham, Head of Digital, Consumer Products and Retail, at Capgemini, commented: “The height of summer usually drives customers online or in-store to update their wardrobes in preparation for their holidays or simply to make the most of the British sunshine. However, with just 5% growth, for both the clothing sector and the wider industry, the disappointment of August’s performance would have been felt across the whole retail sector. We predict this will be short-lived however, as the late Bank Holiday and back-to-school shopping should give September’s Index a significant boost."
Tina Spooner, chief information officer, IMRG, said: “2015 was slow to start for online retail sales, and we wondered whether we had entered a new phase of lower growth when the Index recorded its first-ever quarter of single-digit growth (+7%) in Q1. However, growth has been far more positive since then and it’s likely that the record August low was actually a blip caused by a number of factors. A feature of 2015 has been lower average basket values, but over the past two months these have recovered and conversion rates remain at their highest level in years as we approach the crucial peak period.
“Looking ahead, we expect September’s Index results to be back on track with our 2015 growth forecast, considering it will be on the back of single-digit growth during September 2014.”
