July Online spending hits £5 billion

The latest results from the IMRG Capgemini e-Retail Sales Index reveal that shoppers spent £5 billion online in July, the most in any month this year. With Brits spending an average of £81 per person, online retail has shown a marked turning point

since the lows of the last two years with consistently high growth levels throughout the first half of 2010. The Index has grown by 18% compared to last July, in the biggest annual jump for the month of July since before the recession in 2007. As retailer promotions drew shoppers online, an impressive growth rate of 14% was recorded compared to June – the highest monthly growth of 2010 so far.

A true British summer materialised in late July, with over twice the average rainfall for the time of year recorded. Growth in travel sales rose by a third as a result, with Brits escaping the drizzle in favour of last minute deals in hotter climes. The travel sector grew by a greater amount compared to June than any other sector analysed in the Index, as consumers took advantage of heavy discounting by travel companies to book last minute holidays.

Alcohol sales took a knock after the highs of the start of the international sports season in May and June, and perhaps after England’s disappointing performance in the World Cup. Sales of beers, wines and spirits online fell by a tenth compared to the previous month.

Chris Webster, Vice President, Head of Retail Consulting and Technology, Capgemini, said: “Although online retail sales survived the recession more convincingly than high street sales, the last two years or so have no doubt been shaky at times. It is really encouraging to see growth levels returning to those seen pre-2007 and before consumer confidence was knocked by the financial crisis and recession. The stand-out result this month came from the travel sector, which was boosted by shoppers taking advantage of last minute deals to escape the disappointing summer.”

David Smith, Managing Director of IMRG said: “With over half of the UK population online at least once a day it is no surprise that online sales continue to grow impressively year on year. The evidence mounts that high street retailers will need to invest more in their online business and put it at the heart of their retail strategy. Online retailers, on the other hand, will need to continue to innovate as they strive to close the growth gap.”

The performance of retailers with a high street and an online presence continues to outshine that of online only retailers. Multichannel retailers witnessed growth of 18% compared to last month, while online only (‘pureplay’) retailers showed month on month growth of only 8%. Multichannel retailers are also managing to convert more browsers into actual sales, with an average conversion rate of 4.49%, compared 4.35% for online only retailers.

Image: Online shopping