LONDON: At the same time as UK brick and mortar retailers continue to face multiple challenges in the first half of the year, online retail has seen better than expected sales growth, according to the latest data.
The Capgemini IMRG eRetail Sales Index has been tracking online sales in the UK since April 2000 and its findings for the first half of 2018 revealed that sales were up 16.8% year-on-year.
That represented the highest average H1 year-on-year-growth since 2011 and also placed online sales over the period comfortably above the five-year average of 14.1%.
In addition, the average basket value over H1 2018 was at its highest for a decade at £94, which outperformed the 5-year average of £85, although conversion rates for online retailers actually declined overall in every month other than May.
Capgemini and IMRG (Interactive Media in Retail Group) said this could be attributed to the ongoing trend of shopping via smartphones, which account for a larger share of total online sales but feature lower conversion rates.
The report also noted that spending via smartphones increased 39% in the second quarter compared to the same time last year.
Apart from the rise of smartphones and their influence on e-retail sales, the report also suggested that the unusual weather that the UK has experienced this year also played its part.
Online retail grew by 15.3% year-on-year during the fiercely cold spell between January and March, while the unseasonably hot weather in April also played its part in deterring shoppers from the high street.
The unpredictable weather benefited some particular retail categories, such as the garden sector, which saw year-on-year growth of 24.9%, its strongest half since 2014, while clothing recorded 16.3% growth in the first quarter and 17.8% growth in the second.
Health and beauty also saw its best growth during the winter months of the first quarter, with growth up 18.6% year-on-year, declining slightly to 17.7% for the full first half of the year.
“The year started with a lot of doom and gloom and uncertainty around retail,” said Bhavesh Unadkat, principal consultant in retail customer engagement at Capgemini. “What has been encouraging is how well online retail has performed in H1, particularly in seasonal categories like Clothing and Garden.”
Andy Mulcahy, strategy and insight director at IMRG, agreed while noting that the performance for online sales in the first half of the year has been “a lot stronger than anticipated”.
Sourced from Capgemini, IMRG; additional content by WARC staff