Online retail sector enjoys strong start to year, IMRG Capgemini e-Retail Sales Index shows

According to the latest figures from the IMRG Capgemini e-Retail Sales Index the online retail sector has started the year on a high, recording a solid 15% annual growth in January (excluding travel); more than double the 7% recorded in January 2015. The strong performance suggests that the Black Friday effect – which appeared to influence a lingering downturn in sales growth in Q1 of last year – has not been repeated this year.

If the positive performance is continued, it may be that the Black Friday effect was a blip last year due to the surprising scale of the event, or it could be that other factors – such as uncertainty around the election and strength of Sterling – also played a significant role in supressing growth in early 2015.

The positive performance of the overall Index was felt across many of the individual sectors, including the sale of clothing and electrical items, both of which recorded a 15% year-on-year (YoY) growth; the highest annual growth for the electrical sector since November 2014. January also saw the travel sector’s usual annual peak, recording an impressive 188% increase on December, and 11% on the same period last year.

Not all sectors enjoyed such a strong start to the year however. Dry January resulted in alcohol sales experiencing its weakest performance since February 2014. The sector saw a 2% fall on January 2015, and a 65% decrease on December’s results. Similarly, the accessories sector recorded its lowest ever annual increase of just 12%, the first time it has dropped below the growth of the wider Index.

The Index also highlighted an emerging trend in terms of the growing performance disparity between sales made via smartphones and those on tablet devices – with annual growth for tablets up just 13%, while smartphone growth was up 96%.

Richard Tremellen, retail insight and data specialist, Capgemini, said:  “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.”

Tina Spooner, chief information officer, IMRG said: “The latest Index results reveal a strong start to the year for the UK online retail industry, with annual growth reaching the second-highest rate recorded over the past 14 months.  The 15% growth in January is more than double the growth rate observed in the same month last year, when the knock-on effect of Black Friday continued into the early part of 2015, and is ahead of IMRG and Capgemini’s 2015 growth forecast.

“The divergence between the use of mobile devices is becoming increasingly apparent – growth rates via smartphones surged 96% year-on-year, with confidence in using them for shopping most likely boosted by the design shift toward larger screens, together with improved retailer mobile sites. Conversely, growth in sales completed on tablet devices fell below the overall online growth rate for the first time since we started tracking it – up 13% from January last year.”