Online retail sales fell -25.5% Year-on-Year (YoY) last month, which is to be expected when compared to March 2021’s high growth of +57%. That is according to the latest IMRG Capgemini Online Retail Index, which tracks the online sales performance of over 200 retailers. Looking at the Month-on-Month (MoM) picture spending patterns appeared in line with expectations for this time of year, although this does belie a general sense amongst retailers that customer behaviour is becoming increasingly unpredictable – with some weeks weaker than expected and others stronger. Without the anomalous pandemic growth for comparison next month’s data will reveal a clearer indication of what growth is really looking like.
Month-on-Month growth has crept back into the positive – coming in at +5% versus the previous month’s -7.7%. This is exactly where it was in 2019 before the pandemic disrupted the metric. Meanwhile the average basket volume (ABV) has once again climbed by £15, now standing at £136
At a category level, womenswear and menswear continue to exhibit positive growth (+20% and +14% respectively), whilst the rest of the categories show poor YoY changes – ranging from -2% in footwear to -44% in homeware and decorations.
Andy Mulcahy, strategy and insight director, IMRG, said: “The Index shows that online retail maintained a big dip (-25.5%) during March, but that is against huge growth last year so is not necessarily indicative of poor performance. However, many retailers are reporting volatile traffic and sales spikes to us, with very little consistency in when one retailer does well and another badly. Retailers also report having to employ strategies such as discounts and offers to stop sales dropping, so while the index isn’t tracking major fluctuations, behind the scenes things are more frenetic than they seem; there is consistency in the inconsistency.
“On another note, Black Friday 2022 is on 25 November, which we recently found out is the same day that England play USA in the World Cup. Retail has never faced the distraction of the biggest global sports event before in the lead-up to Christmas, especially on the most significant ecommerce day of the year, but that could be a big factor disrupting it.”
Lucy Gibbs, senior manager, retail lead for analytics & AI, Capgemini, said:“Despite the continued sales dip, online appears to be maintaining an increased share of the market two years since the pandemic began. However, there are strong headwinds facing the sector, with cost-of-living pressures and record high fuel prices affecting consumer confidence as well as increasing operational and supply costs for retailers. While retailers are doing what they can to mitigate against price increases, we have already started to see the impact on certain products, such as electricals and the overall average value of a basket continues to trend up, 12% vs February. Order volume has also dropped down to a new low of -42%, potentially indicating that purchases are already becoming more considered. Weathering this storm will require tuning in to consumer reactions, where value for money will be at the forefront of decision making “.