The UK has always been one of the countries at the forefront of the ecommerce revolution but the latest figures suggest that it is now experiencing a period of low growth according to figures from the IMRG Capgemini e-retail sales index.
Whilst online retail sales in the UK increased by over 10% in May 2017 compared to 2016, it represents the lowest growth rate in over a year and a half. Several key factors are thought to have caused this including the surprise general election and rising inflation.
“As spending warms up with the start of summer, May and June are usually two of the strongest months of the year. With ongoing economic and political uncertainty however, this month’s results show a clear reversal of that trend,” said Bhavesh Unadkat, principal consultant in retail customer engagement design at Capgemini.
Sector By Sector
The clothing sector was one of the sectors that was squeezed the hardest and had growth of just 7.6%, the lowest figure for May ever recorded by the index. Gifts suffered too with its lowest growth rate since 2009 at just 5.5%. Electricals too struggled, with an actual dip in growth of minus 8.6%, the only negative year on year growth it has ever experienced since the tracking began in 2003.
IMRG editor Andy Mulcahy said: “Shopper confidence tends to take a hit just before an election so, while the fact we were actually having a General Election may have been a surprise, a drop in online retail sales growth preceding it is not.
“Growth usually rises again soon afterwards – even in July 2016, the month after the Brexit vote and all the uncertainty that came with it, sales were up 18.6%.
“The issue this time is that we now have a hung parliament, which leaves all political options still available, including the potential for yet another general election in the near future. 2017 is certainly turning out to be a very challenging year for retailers to navigate.”
Changing Shopping Trends
However, despite the bleak outlook for sales themselves, what was interesting from the report was how people are shopping. Sales growth through tablets dropped to a record low in May, down by nearly 5% year on year. This is most likely due to more and more consumers doing the vast majority of their online shopping through their smartphone devices. With more and more ecommerce sites now mobile friendly and optimised for the mobile experience, sales growth online through smartphones in the UK has shot up by a staggering 46.2%.
For more details on the report, go to https://www.imrg.org/data-and-reports/imrg-capgemini-sales-indexes/