UK e-tail gets cold weather boost, fashion is strong
The ‘Beast from the East’ as the recent snowstorm was dubbed in the UK may have dented sales at physical stores in February but it contributed to a 13.1% growth rate at webstores, according to the latest Capgemini IMRG eRetail Sales Index.
The Index showed continued growth of online spending in early 2018, with smartphone spending especially strong (+38.5%). Fashion sales also managed a 14.9% rise, with accessories and footwear the top performers within this, rising 22.3% and 20.4% respectively. And health & beauty rose at the highest rate in five years (+33.85%) while gifts rose 9%.
Yet the fact that more and more people are researching online rather than going there to simply buy meant that conversion rates fell to 4.2% from 4.6% a year ago. Conversion rates for both pureplay and multichannel retailers weakened, although that doesn’t necessarily mean bad news.
The fact is that everyone is spending much more time online just browsing and so conversion rates were always bound to dip. But as the sales rise shows, it’s not hurting turnover. In fact, average basket value (ABV) last month rose by £11 in comparison to last February.
But what about that weather impact? The Index showed as much as a 3.5% boost from shoppers going online rather than venturing out to stores in the snow. Of course, that could mean that the current month’s figures might not looks so good in comparison, although some mid-March snow will see a minor continuation of the trend.
The strong growth in smartphone sales was encouraging and certainly justified the strategy of many e-tailers to focus on smartphone apps. But the growth is slowing. February’s 38.5% uplift was much lower than the 57% increase of February last year, although that’s only to be expected as smartphones reach greater maturity.
Meanwhile tablets, continued their now four-month-long decline, decreasing 6.7% year-on-year, a record low for this device type.
Bhavesh Unadkat, principal consultant in retail customer engagement at Capgemini, said: “February’s sales patterns clearly demonstrate the power of extreme weather on shopping habits; as people avoid the high street in favour of cosier shopping from their well-heated living rooms. As the snowy weather continued well into March we anticipate a continuation of this trend in next month’s results.
“We’d also draw attention to the performance of the US retail market, which has just reported its third consecutive month of falling sales. As the US market is often seen as ahead of the UK’s this could foreshadow a similar trend in the coming months. Fortunately for internet retailers, the US reported 1% online sales growth.”
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