Retail Technology
| Log in | Subscribe

Subscribe | Log in
Retail Technology

Retail slows despite e-commerce growth

By Retail Technology | Friday December 21 2012

Sales figures find those without electronic presences are likely to miss out this Christmas

The festive season has lost some of its sparkle for retailers, with growth in sales on the High Street slowing in December, the CBI said today.

Yet the e-Retail Sales Index, compiled by trade body IMRG and IT consultancy Capgemini, found better-than-expected performance for online sales in November. 

Building on successes proves difficult

Responding to the CBI’s latest monthly Distributive Trades Survey during the first two weeks of December, 36% of retailers reported an increase in volume of sales compared to a year ago, with 17% a decrease. The resulting balance of +19%, though broadly in line with the long-run average (+21%), matched neither the stronger increases in sales volumes seen in the previous two months (+30% and +33%), nor retailers’ expectations (+25%). As a result, retailers considered sales volumes to be below average for the time of year (-18%), disappointing expectations that they would be in line with seasonal norms (-1%).

The CBI predicted sales growth would continue losing steam next month, with retailers expecting a slower rise once again in the year to January (+10%), while orders placed on suppliers are expected to be flat.

Judith McKenna, chair of the CBI Distributive Trades Panel and Asda chief operating officer, stated: “While families are making their budget stretch as far as possible for the Christmas season, the Christmas spending spirit can only go so far. In reality, sales growth has actually slowed since the Autumn and retailers are expecting a further slowdown in the New Year.”

Online pre-Xmas sales fill High Street hole

By contrast, the latest figures from the IMRG Capgemini e-Retail Sales Index have recorded yearly growth of 18% in November, up 25% on October 2012, equating to a very significant £8.4 billion (bn) spent online. It is also the first time since the Index launched in 2000 that spending has topped the £8bn mark for a single month. 

With Christmas shopping apparently well and truly underway, a strong performance was recorded across the board, but it was the sectors most traditionally associated with the season that saw the greatest pick up. Health & Beauty had a healthy 82% increase from October, whilst Gifts saw 38% year-on-year growth and 132% month-on-month, the highest in almost five years.

Tina Spooner, chief information officer at IMRG, commented on the strong mobile trend: “Britons soaring use of smartphones and tablets is also evident in the Mobile Index results, and confidence in the channel is clearly growing. The conversion rate of 2.1% is the highest recorded yet and a sure sign for retailers that mobile has to form a key part of their strategy going into 2013.”

Online and mobile become integral

November was a solid month for the Shop Direct Group brands, with overall sales up 2.5% on last year against strong comparatives. Gareth Jones, group retail & strategy director at Shop Direct Group and IMRG member, added: “The mobile revolution also continued at speed during November, with sales from smartphones and tablets representing 24% of total online spend. That represents phenomenal year-on-year growth of more than 250% – a trend that shows no sign of slowing.”

Chris Webster, head of retail consulting and technology at Capgemini, concluded: “These results are particularly strong and gives a clear indication of what we can expect to see during the peak shopping weeks in December. E-retail continues to be the growth engine of an otherwise struggling retail sector and we can see just how integral the online and mobile channels have become to the shopping experience.”

Related items

DFS launches online AR functionality

By Retail Technology | Retail Technology

AllSaints ‘Logs-in and Pays with Amazon’

By Retail Technology | Retail Technology

‘Silver Surfers’ ignore tech-led shopping

By Retail Technology | Retail Technology

eBay and PrestaShop expand European integration

By Retail Technology | Retail Technology

CarShop provides ‘wholistic’ car buying experience

By Retail Technology | Retail Technology

Mobile overtakes desktop traffic on retail websites

By Retail Technology | Retail Technology

Splash About updates online strategy

By Retail Technology | Retail Technology

International marketplaces key to UK retailers

By Retail Technology | Retail Technology

Morrisons fine tunes e-commerce strategy

By Retail Technology | Retail Technology

Shopzilla boosts e-commerce with Big Data

By Retail Technology | Retail Technology