August heatwave and consumer confidence boosts online sales
The IMRG Capgemini eRetail Sales Index has revealed online sales growth of 16% year-on-year (YoY) in August; equating to £9.8bn online. The strong performance is in stark contrast to August 2015, during which the Index recorded a growth of just 5%.*
The long awaited heatwave that much of the UK experienced last month, as well as the hottest August day in three years, is likely to have contributed significantly to the strong performance of the Index. The hot weather ensured shoppers continued to splash out on summer clothing, resulting in a 20% YoY increase for the clothing sector and 48% for accessories. August was also strong for the lingerie sector which grew 44% YoY.
Other sectors boosted by the sunshine include the online sale of alcohol, which saw its first month of growth (4%) since March 2016. The home and garden sectors also recorded a healthy performance in August, increasing 30% and 25% respectively.
Last month marked a significant milestone for smartphone penetration. The Index revealed that for online sales made via a mobile device, 49.5% were made on a smartphone, compared to 50.5% for tablet. This is a YoY increase of 18.5% for smartphones, which in August 2015 accounted for just 31% of mobile sales, compared to the 69% made on a tablet.
Tina Spooner, chief information officer, at IMRG said:
“The solid performance in online sales continued during August, resulting in overall growth year-to-date reaching 15%, which is ahead of our growth forecast for 2016.
Following the initial turbulence reported by some retailers during the week following the EU referendum vote, the latest Index results suggest e-retailers had a successful summer, with many reporting normal trading patterns for this time of year. It appears the weak pound has helped boost international sales for some merchants who have reported buoyant sales from customers outside the UK, with countries within the eurozone showing particularly strong growth.
“The shift towards smartphones as the preferred device for online shopping continues, with almost half of all mobile commerce sales now completed on these devices and annual growth rates on smartphones around 14x higher than those recorded on tablets year-to-date.”
Bhavesh Unadkat, management consultant in retail customer engagement design, Capgemini, said:
“It’s reassuring to see consumer confidence remain buoyant – a growth of 16% on the year is extremely strong. Mobile continues to impress with a near even split between traffic from mobile and desktop. However, the more interesting element is how conversion from smartphones continue to increase, it was under 1% last year and is now nearly 2%. Soon it will double again, and if retailers can hold their traffic and drive that level of conversion then it will not be long before mobile overtakes desktop in online sales. As always, a seamless cross-channel and device journey is key to ensure market share gains are driven at a customer level and not just isolated to one channel.”
Last month saw online only retailers continue to outperform their multichannel counterparts (those with both an online and a physical presence) recording a 22% annual growth, compared to just 13%. *Please note that this is partly explained by Bank Holiday sales falling in September’s figures in 2015