British shoppers spend 14% more on line in October 2012, new Index reveals

Figures from the IMRG Capgemini e-Retail Sales Index have revealed solid growth in internet retail sales in October 2012, with British shoppers spending £6.7bn online – a 14% year-on-year growth on October 2011, and a 5% increase on the previous month.

The overall growth of the channel and, in particular the huge leap in the gift sector (62% month-on-month),  supports the earlier forecast from IMRG and Capgemini that Christmas 2012 will see record growth in online shopping. E-commerce is expected to hit £4.6bn over the two weeks commencing 3 and 10 December 2012 – 15% up on the same period last year, putting the Index firmly on track to meet the predicted annual growth of 14%.

Year-on-year growth in the m-commerce sector grew 261% in October 2012. The increased significance of mobile devices in the British retail space was highlighted by the same Christmas forecast, which predicts 20% of purchases made online during the peak shopping weeks, close to £1bn, will be made via mobile devices (smart phones and tablets) – a huge opportunity for retailers who have implemented mobile solutions, said researchers.

The figures for October 2012 also follow the recent trend of online-only retailers exceeding multi-channel retailers on year-on-year growth. October 2012 saw unabated growth for online-only – the growth gap with multichannel counterparts widening to 5%.

In terms of specific sectors, October 2012 has seen steady performance across the board. Year-on-year growth in the clothing sector stood at a solid 12% and recorded an average spend of £60 – the highest in over two years and prompted by the chilly spells.

The electrical sector saw the strongest year-on-year growth since July 2012, a result of the release of the iPhone5 at the end of September 2012. Demand from the committed Apple fans across the UK in October fuelled the sector growth to 14%, both year-on-year and month-on-month respectively.

Chris Webster, head of retail consulting and technology at Capgemini, said: “With the economy slowly improving but with a highly uncertain future, online shoppers are spending but only cautiously as they save up prior to Christmas. There is much growth to be tapped in the internet market but knowing your target audience and matching their expectation with your offering is crucial. The explosion in m-commerce suggests retailers are meeting this expectation and satisfying customer demand.

“Overall the outlook for e-retail is very positive and the October 2012 results, though modest in comparison with that of September 2012, only confirms our 14% year-on-year annual growth forecast and our expectation for a successful Christmas.”

Andrew McClelland, managing director at IMRG, said: “14% is a solid result for the October Index figures, albeit just below our quarterly forecast of 15% for Q4. This year we really expect online sales to hit their peak in early December, when we estimate £4.6bn will be spent during the peak Christmas fortnight. The real story this year is about mobile though, as we anticipate that 20% of online sales will be made through smart phones and tablets this Christmas. The pace at which mobile sales have grown in 2012 is staggering and there are no signs it will slow up going into 2013.”

Sector % Change in Index October 11 – October 12 % Change Month on Month
Beers, Wines and Spirits -5% 0%
Clothing, Footwear and Accessories 12% 6%
 – Accessories 30% 4%
 – Footwear 15% 9%
– Lingerie 12% -8%
Electricals 14% 14%
Gifts 30% 62%
Health and Beauty 0% 20%
Other 15%