Travel sector enjoys 31% year-on-year growth, while £5.1bn is spent overall during January

Travel sector enjoys 31% year-on-year growth, while £5.1bn is spent overall during January

The latest figures from the IMRG Capgemini e-Retail Sales Index reveal that shoppers in the UK spent a total of £5.1 billion online during January, or 21% more than the same time last year.

The results from the travel sector showed a 31% rise compared with the amount spent in January 2010. It seems Brits fought off the January blues with dreams of golden beaches and snow-capped ski-slopes. Significantly, the average basket value of holidays booked was £886, the highest recorded since the launch of the sector in December 2008.

Phillip Rinn, eBay director of advertising partnerships, commented: “The 31% year-on-year increase in online travel spend highlights just how much consumers are embracing online as a popular channel for holiday and travel-related purchases. Travel is one of the sectors of the UK economy that saw the earliest adoption of the internet as an initial point of purchase and this trend shows no sign of abating. From a marketing point of view, it’s therefore important that online has a proportionate share of the overall spend when brand marketers are allocating budgets.”

Spring is in the air

Another sector that recorded impressive growth was home and garden. After five months of annual decline, the Index reported that the sector made a significant year-on-year leap of 56%, with an average basket spend of £120.

Also, in a detoxifying January, alcohol sales declined by a huge 67%, a result of online shoppers cutting back on the excesses of the festive period.

Chris Webster, head of retail consulting and technology at Capgemini, stated: “January was a very interesting month. As expected we saw a strong growth in the Index following a very weak start last year, but the jump in the travel sector and the gap between multichannel and pure plays has come as quite a surprise. In regards to the surge in travel, it seems that the British consumer is looking ahead to sunnier times and taking full advantage of the big New Year sales offered by the major travel operators. It remains to be seen whether the sector continues this growth in February following the recent announcement that Iceland’s second largest volcano, Bardarbunga, is on the verge of erupting.”

Multichannel continues to gain

The Index painted a varied picture of the performance of online businesses, with multichannel retailers making the most of their brand and physical presence to secure a greater share of spending. Both multichannel and online only (including catalogue) retailers declined at a similar rate from December, -24% and -27% respectively. But in terms of year-on-year, multichannel jumped a significant 30%, while online only grew just 8% compared with January 2010.

Tina Spooner, director of information at IMRG, said: “While the Index results for January show a very encouraging start to the year for e-retailers, it is important to note this strong growth is on the back of the lowest-ever annual growth recorded in January last year when the e-retail market grew just 4.6%. Multichannel retailers performed well last month with sales growing by almost a third compared with January last year, but the pureplays and catalogue retailers saw annual growth dip to 8%, following a year of steady growth in 2010.

“Sales of travel were strong during January, particularly after the severe winter weather in December. Clearly, Britons are not tightening their belts where holidays are concerned, with the Index recording the highest average spend in this sector in over two years.”

Positive e-commerce outlook

Jonathon Brown, John Lewis head of online selling, commented: “In January johnlewis.com continued to see significant outperformance as our customers responded to our excellent product offer and great customer experience. Overall sales were up over 35% with all buying groups outperforming last year. Most notable was fashion, which continued to drive forward with sales +70% on the same month last year. The category was boosted by phenomenal sales in womenswear, accessories and beauty. Home, on the back of our Clearance offer, had a very strong month with sales up over 30% on 2010. Overall it has been a great way to finish the financial year and having passed the £500m landmark (for the year), we have certainly closed out on a high.”

Gareth Jones, Shop Direct Group retail director, added: “We have maintained the strong sales performance that we saw over the Christmas period. Sales via mobile devices have been particularly pleasing and have continued to show impressive growth, with a 320% year-on-year increase being recorded for January.”