Online retail off to a great start this year

Online retail was off to a great start this year, with two important elements noticed.

First – retail saw a 15 per cent annual growth and second – no one knows exactly why sales fell in Q1 last year.

According to the new IMRG Capgemini e-Retail Sales Index, Clothing and Electrical items recorded a 15 per cent year-on-year (YoY) growth, which is the strongest annual growth since November 2014. The Travel sector experienced the ‘usual’ peak, recording a 188 per cent increase on December, and 11 per cent on the same period last year.

Dry January was quite a successful movement this year, with alcohol sales dropping 65 per cent compared to a month earlier, and 2 per cent compared to a year before.

Smartphones were the number one device used for online shopping – annual growth for shopping via mobile phones was 96 per cent, while tablets recorded a 13 per cent increase.

Last year at this time, market analysts noticed something they called the Black Friday effect – a downturn in sales growth in Q1. This year, the effect has not been repeated, with analysts questioning why.

There are two possible scenarios, according to the report, one being that the Black Friday effect was a blip, due to the surprising scale of the event.

The second scenario is a combination of factors, including uncertainty around the election and the strength of Sterling. Richard Tremellen, Retail Insight and Data Specialist, Capgemini, commented: “As we settle into the New Year, with the busy festive period behind us, the retail sector will be relieved to see such impressive results. It’s a strong indication that consumer confidence is continuing to grow and puts us in a good position for a strong 2016.

“The sustained growth of sales via smartphones in January also demonstrates the progress retailers have made in developing the customer experience on their mobile platforms.”