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IRMG finds negative online growth during July

By Retail Technology | Monday August 19 2013

E-commerce sales grow 9% year-on-year, but marks first ever negative Index growth between June and July in 13 years

Online sales recorded the first ever negative growth between June and July (-2%), following strong annual growth in June (20%), according to the IMRG Capgemini e-Retail Sales Index.

Sales rose by just 9% in July, the weakest annual growth since January 2010. And the negative growth marks the first ever recorded between June and July in the 13 years that the Index has been compiled. 

The unseasonal dip did not dent performance during the first half of 2013 (January – June), with the Index growing well above expectation; average growth was 16% against a forecast of 12% for the year. But, as July saw the UK heat wave drive people outside, online sales growth dipped while High Street sales appear to have performed far more positively.

Jul’s online sales performance reflects a recent poll by IMRG, which found two thirds of the retailers surveyed found the prolonged hot weather in July had a negative impact on their online sales. The research also revealed that a number of merchants saw sales drop as the heat wave set in, while some experts suggested that online promotions were perhaps not strong enough to lure shoppers away from the High Street in the good weather.

Online still outperforms multichannel

Despite a fall in sales, online-only retailers outperformed their multichannel counterparts in July. Online-only saw year-on-year growth of 13%, while retailers that have both a physical and online presence recorded just 6% growth, the lowest reported by the Index for this group since IMRG and Capgemini started tracking it in 2010.

The M-Commerce Index continued to grow rapidly, with sales up 129% year-on-year in July, although the rate is significantly down on the levels seen in 2012. However, the conversion rate via mobile devices (smartphones and tablets) has improved over the past year and was 2.5% in July.
Tina Spooner, chief information officer at IMRG, agreed that there was no doubt that the prolonged heat wave had a detrimental effect for online retailers. “Following the coldest spring in over 50 years, it is hardly surprising that Britons headed outside when the much-needed sunshine appeared,” she said.

Recognising m-commerce advantage

“It is interesting to note however that it is only desktop sales that appear to have been impacted; the mobile sales growth of 129% is lower than in recent months but not significantly so, suggesting that consumers still shopped via their devices while bathing in the sun.”
Alex Smith-Bingham, vice president of digital and multichannel services in the consumer products and retail practice of Capgemini Consulting, added: “While this [warm weather] did have an impact on e-retail, the sector is still performing well, with total online sales for 2013 to-date standing at a solid 15%. I have no doubt online sales will return to high growth as we countdown to Christmas.”

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