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Tech supports Xmas retail recovery

Tech supports Xmas retail recovery
Tuesday November 5 2013

Seasonal indicators and forecasts suggest retailers can build on positive e-commerce growth through Christmas trading season supported by tablet adoption boom

A number of seasonal indicators released this week by retail trade organisations should give online and multichannel retailers reasons to be cheerful in the countdown to this year’s Christmas shopping season.

Looking back to last month, the British Retail Consortium (BRC) today released figures that showed UK online retail sales set a new record in terms of their penetration rate into total non-food sales.

E-commerce saves October sales

The BRC-KPMG Online Retail Sales Monitor found online sales of non-food products in the UK grew 12.1% in October versus a year earlier. In October 2012, they had increased by 7.3% over the previous year. And the October 2013 figures represented 18.3% of total non-food sales, echoing the findings of e-retail sector research released earlier this month.

It also said that, excluding October's double-digit online sales, clothing and footwear would have shown a decline for the third month in a row. Online sales also contributed 1.4 percentage points to total non-food sales growth last month. In the last three months, the contribution averaged 1.3 percentage points – over a third of the total non-food growth.

Helen Dickinson, British Retail Consortium director general, suggested ‘click & collect’ demand would contribute to the encouraging start to many Christmas campaigns. “It's expected that many of us will ‘click into Christmas' more than ever before this year and retailers have invested significantly in user friendly websites, fast deliveries and convenient ways of buying in-store, at home or on the move,” Dickinson said. “These figures are an encouraging sign that these improvements are striking a chord with customers.”

David McCorquodale, head of retail at consultancy KPMG, added: “In fact online sales accounted for a third of the growth seen in the non-food sector over the last quarter, underlying their magnitude to both the retailer and the consumer.”

Online forecasts record spending

Consumer spend with online retailers is also forecast to reach £10.8 billion in December this year according to analysis carried out on the IMRG Capgemini e-Retail Sales Index, which is the first time it will break the £10bn mark.
 
Looking at the final nine-week period of the year (covering November and December), the estimated spend will total £20.4bn. The e-retail trade body and IT consultancy anticipates that the peak period will cover the weeks commencing 2 and 9 December, where the sales activity on retail websites will be at its highest.
 
They also said the busiest day overall in terms of sales volume will be Monday 2 December, although the peak day does vary by retailer. IMRG and Capgemini also anticipates the average conversion rate across all devices will hit a five-year high of 5% in the fourth quarter. This follows three successive quarters of increased conversion rates compared with the same periods last year.

Tina Spooner, chief information officer at IMRG, commented: “For the first time in three years we expect annual e-retail growth to exceed the level recorded in the previous year, with 2013 sales on target to achieve 15% growth on last year. The increase in the number of browsers that convert to buyers is also positive news for retailers as they gear up for the key festive trading period, with the average conversion rate expected to reach pre-recession levels during the fourth quarter.”

Tablet gifts to boost seasonal traffic

Software company Adobe also today released its Digital Index 2013 Online Shopping Forecast, which predicts 12.4 percent of total online sales in Europe during November and December will come from mobile devices, a 68% year-on-year increase.

It also projected the UK to have the highest mobile share of online sales during the holidays of any European country analysed with 20.4% (i.e. 20.4% of all online holiday sales come from a mobile device), well above the projected European average of 12.4% and the US projected average of 14.4%. And on the highest grossing online shopping day in the UK, 2 December, it forecast online sales will be 2.18 times the 2013 average in terms of daily online sales. 

Mark Phibbs, vice president of marketing in Europe, Middle East and Africa for Adobe, added: “While tablets have certainly stolen the mobile spotlight and often generate three to five times more online sales for retailers than do smartphones, in every European country we analysed, retail transactions on smartphones are growing faster than retail transactions on tablets. While this phenomenon is certainly aided by the recent introduction of smartphones with larger screens, it’s a reminder to retailers that a mobile strategy must include smartphones and not just tablets.” 
 
Shingo Murakami, managing director of Rakuten’s Play.com, urged retailers not miss out on the technology-enabled opportunities these positive indicators support. “For retailers, both online and offline, who cannot afford to miss out on the additional revenue brought in by online over the festive season – it’s crucial they have a strong multichannel offering and a clear digital strategy, including reward opportunities, incentives and of course, great customer service.”

Tagged as: Christmas | multichannel | online | e-commerce | m-commerce | mobile | click & collect | tablet | BRC | KPMG | IMRG | Capgemini | Adobe