Essential reading for retailers and suppliers in the home improvement market

Online sales increase against some poor in-store results

Published: 25 August 2017 - Jack Cheeseman
 

Recent figures have revealed that bad weather and continued economy uncertainty has hit summer sales. Not only this, but shoppers have been heading online to seek out better discounts and deals.

The IMRG Capgemini Sales Index for August shows that UK online retail sales grew by 11.1% in July, which is a 0.3% increase from June. Month-on-month performance was up 0.9%.

As part of the Index, home and garden reported a second strong month, with 17% per cent.

However, this comes following negative results from Homebase and B&Q. Revealed in Kingfisher’s second quarter figures, revenue at B&Q dropped thanks to store closures and a seasonal sales dip.

IMRG’s report took into account that the summer sales period was underway and retailers were fighting against online events, such as Amazon Prime Day.

Bhavesh Unadkat, principal consultant in retail customer engagement design, Capgemini, said: “We’re seeing the slowdown in purchasing continue across July as this trend of low consumer confidence lingers. With the pound almost running level with the euro luxury purchases and ‘nice-to-haves’ are hit hardest.”

Also, the average online conversion rate in July was 5.8%, which IMRG said is a very high result, and unusual for any month outside of December.

Justin Opie, managing director, IMRG said: “Conversion rates being up sounds positive, but the fact that it didn’t deliver a similar boost to sales revenue growth suggests discounting was probably a factor in driving more visitors to complete a purchase.

“Prime Day is an established event in the calendar now and it may be exerting an impact judging by this month’s results, although other factors – such as rising inflation and consumer confidence – may also be at play.”

Last year, ecommerce was worth £133bn in the UK, a 16 per cent growth on the year before. Around £25bn was spent online in the period between 13 November and 24 December last year.

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