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Published
Mar 22, 2017
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M-commerce growth slows in UK but still leaves other channels trailing

Published
Mar 22, 2017

Online sales are continuing to grow fast in the UK but the pace of sales via smartphones is slowing. Does that mean all the retailers that are investing heavily in m-commerce apps and mobile advertising should be worried? Not really. M-tail is still the biggest growth area for UK retail and its high-double-digit growth figures are at a level that physical stores can only dream of and online sales overall continue to boom.


Shoppers in the UK remain addicted to their smartphones even though the m-commecre growth rate is slowing



IMRG Capgemini’s monthly e-Retail Sales Index said online retail sales grew 15% year-on-year last month, slightly less than the 16% growth seen a year ago. M-commerce growth was 57% this time and it proved that one channel’s ‘slowdown’ would be explosive growth for another channel.

Importantly, the multichannel average basket value was up £20 year-on-year and for the second month running was at a seven-year high for that month of the year.

IMRG sounded a note of caution and said sustaining the overall rate of growth for the rest of 2017 could be a challenge given the m-commerce deceleration.

So by just how much did shoppers apply the brakes to sales made through mobile devices? For the past three months, the rate of growth through such devices has almost halved year-on-year and last month’s 57% was a big comedown from the 96% growth of a year ago. But 57% is still massive growth.

And it is smartphones that are benefitting as IMRG said tablet growth remains low. The latter rose only 3.5% last month but, again, it was a rise nonetheless and shows that tablets are not devices that can safely be ignored.

Yet with smartphones taking a greater share of sales through mobile devices, IMRG said “a sustained slowdown in sales growth through this channel will come to impact upon growth rates for online retail overall.”

Should we be surprised by this? Perhaps not. After the major advances made in the last two years, it was always clear that m-commerce growth would have to slow at some point. The same effect has been seen on overall online retail growth rates for much of this century. But online sales continue to increase and have also seen some disproportionately large rises in some years, driven both by tech development and greater consumer ease with the channel.

Encouragingly, IMRG also said in its report that the m-commerce slowdown was specific to pureplay retailers last month. For multichannel retailers, which have both an online and in-store offering, growth in sales made on mobile devices was up slightly year-on-year.

But while the m-commerce slowdown may have grabbed the headlines, the overall online sales growth figure is the key piece of data in the report.

Bhavesh Unadkat, Principal Consultant in Retail Customer Engagement Design at Capgemini highlighted the slight dip in the figure compared to a year ago and said it could be attributed to “a knock in consumer confidence triggered by higher prices,” adding: “It is perhaps no coincidence that the Index’s growth rate slumped slightly in the face of a higher inflation rate which was over 1.5% in January 2017 compared with 0.3% in January 2016.”

Unadkat also pointed out that traditionally, January and February are slower months for purchases made on smartphones, and e-retail sales in general.

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