With no repeat of last year’s Beast from the East snowstorms and a later Easter pushing back holiday spend, the online retail industry recorded growth of just +5% year-on-year in March against a tough comparator last year, according to the latest IMRG Capgemini eRetail Sales Index. While still positive growth, this subdued performance fell significantly below the 3- (+7.5%), 6- (+7.1%) and 12- (+10.2%) month rolling averages. Breaking it down further, online-only retailers saw marginally better results – growing +8.9% versus multichannel retailers’ +5%.
Across the sectors the impact of a late Easter was most apparent in home and garden, which saw its impressive growth trajectory from earlier in the year slow to just +1.6% year-on-year. Meanwhile despite a strong performance in footwear (+16.7%), the clothing sector continued its five-month run of single digit growth (+3.7%), and both electricals and gifts saw sales plummet by -26% and -22.1% respectively.
In contrast health and beauty had yet another strong month of sales (+15.6% year-on-year), with beauty outperforming the rest of the sectors with a +19.8% increase – perhaps due to a few celebrity beauty line launches last month.
Andy Mulcahy, strategy and insight director, IMRG: “While on the surface of it +5% growth may not seem very positive, there are actually two possible interpretations. On the one hand it looks bad as it’s below the 3-, 6- and 12-month rolling averages of +7.5%, +7.1% and +10.2% respectively; it’s also the lowest of the first quarter of 2019. On the other hand, this growth is against a strong base from March 2018, which featured Easter (home and garden online sales were down -15% in the equivalent week in March this year) and freezing temperatures that kept people away from high streets and boosted online sales in 2018.
“As Easter fell in April this year, the growth rate for that month will determine whether March’s performance can be considered good, bad or indifferent given those factors – not to mention the continuing general macro-economic pressures on retail.”
Bhavesh Unadkat, principal consultant in retail customer engagement, Capgemini: “March 2019 growth at 5% may seem slow but we were up against a very strong March 2018. More concerning is the overall position of clothing – which continued its five-month run of single digit growth (+3.7%for March 19). Many of the larger, often reliably robust, retailers also recorded low single-digit growth. Closing out Q1, clothing now stands at 2.6% growth, significantly lower than last year’s 13.9% growth. This performance is a mix of supply outweighing demand, continued discounting and customers being cautious with spending.
"The beauty market was the stand-out result this month, reporting 19.8% growth, bringing the sector to 16.8% growth for Q1. However, with home and garden also seeing poor results due to the late Easter break and a continued decline in electricals the overall performance was lacklustre. It will be interesting to see whether the Easter holiday will boost April figures enough to spring some life back into this year’s spending.”