Spend diverted from online as sales growth plummets in June, IMRG Capgemini Online Retail Index shows

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Faced with a reopened high street, further easing of lockdown and a comparative twelve-year ecommerce high in 2020,online retail sales continued to fall to record-breaking lows in June, down -14.1% Year-on-Year (YoY). That is according to the latest IMRG Capgemini Online Retail Index, which tracks the online sales performance of over 200 retailers. The Month-on-Month (MoM) dip from May of -4.6% was larger than typical for this time of year in pre-pandemic times, and following similar MoM declines in April and May, this made June’s YoY result the biggest drop in the history of the Index.

At a category level, the picture was similarly dour as retailers continue to struggle against high 2020 comparisons. Almost all categories reported negative growth, with the exception of clothing (+18.6%), beers & wines (+20.9%) and – somehow – garden (+19.9%). In this last case, this comes despite the British summer failing to make much of an appearance last month and over a year of people stocking up their patios and garden sheds. Meanwhile in the week that England prepared to play Germany for a place in the Euro 2020 semi-finals (commencing 27 June), beers & wines sales soared by +52.0%.

Further positivity can also be seen in the Average Basket Volume (ABV) as it maintains a steady growth rate for 2021, suggesting an increasing level of consumer comfort with big ticket and volume spend online. In June 2021 the ABV stood at £134, compared to £85 in June 2020.

Andy Mulcahy, strategy and insight director, IMRG: “Growth rates are confusing at the moment – historically low due to tough Year-on-Year comparators and easing of restrictions, though volumes remain very high – but some metrics are more reliable, such as the overall ABV. While there was hardly any increase in ABV between 2019 and 2020, it has shot up across 2021 so far; in June 2021 it was 62% higher than June 2020.

“There are multiple possible causes, but the main one appears to be that retailers in some categories are finding they are less reliant on discounting to drive sales at the moment; with such high demand running down stock and ongoing issues around supply, shoppers are far more likely to buy an item when they see it in stock, rather than shop around for a better price. This is not true of all categories however, with beauty being a notable exception.”

Chris Long, director, retail consulting, Capgemini: “The steep fall in June of -14.1% is a strong indication that consumer confidence is growing to get back out on the high-street as lockdown eases and the vaccine rollout continues. We can expect this shift in spend between online and the high-street to continue, with retailers grappling demand swings and stock challenges across channels to ensure availability for consumers as their shopping habits change.

“Looking ahead it’s going to be interesting to see how the 19th July ‘Freedom Day’ impacts online spend, although most restrictions will be eased for the high-street there is a potential for an increase in self-isolation numbers from track & trace, which could slow the decline in online demand as many rely on home delivery.”