Christmas e-commerce sales flatline in UK, finds payment provider


Analysis of online spend

Analysis of online spend

Payment services provider (PSP), Computop, has analysed payment patterns across its global network, which handles USD five billion annually in turnover for global retailers, for the final week of November 2011 to get an early indication of how consumer spending behaviour is shaping-up in the run up to Christmas. Purchasing patterns were compared for the same sample, for the same period, in 2010 and 2011.

Key findings from the data show UK retailers experienced no growth in turnover, whilst their Eurozone contemporaries saw a 15% increase and America’s retailers enjoyed a substantial 22% growth in sales.

Speaking about the findings, Ralf Gladis, CEO of Computop, said: “What is most interesting about this analysis is it indicates 2011 could be the first year, since shopping online became mainstream in the mid-1990s, e-retailers in the UK will not experience a significant growth in online sales. 

“However it is also shows this is a local pattern, whilst in Europe and the USA online sales are in rude health. As we enter a less certain economic environment in 2012, this data shows e-commerce continues to be a key growth engine for retailers, even if there are regional variations and impacts from the current economic downturn.”

The UK – no growth

The analysis shows a 9% increase in basket values, however, this is offset by a 7% drop in the number of orders, leaving UK retailers no better off this year than last.

When looking closer at the 2011 figures for the UK, analysis shows although the number of orders in GBP grew by 15% from October to November 2011, basket values dropped by 16%, resulting in a 7% decrease in overall turnover.

The Eurozone – 15% increase in sales

European consumers spent between 6% more in their online baskets than they did last year, which combined with an increase of nine per cent in order numbers, delivers overall growth in sales of 15%.

The US – 22% increase in sales

US consumers spent 22% more money online in the last week of November 2010 compared to the same week in 2011 Basket values increased by 26% in the run up to Black Friday and Cyber Monday.

Gladis said: “Whilst times are looking tough for retailers this Christmas, there are steps they can take to try and escape the flattening growth trend. Optimising shop usability and offering more payment methods are two key recommendations for increasing conversion rates. In addition to this, UK retailers may want to look to expand their customer base into international markets.

“Thanks to the European Union there are almost no legal barriers to entering the Eurozone market. There is no need to establish a legal entity immediately and depending on the choice of payment methods you allow, it might not even be necessary to open a local bank account.”