By Andy Mulcahy, Strategy and Insight Director, IMRG
- Overall online retail sales growth in October was a modest +35.7% Year-on-Year (YoY), compared to last month’s +42%
- However, the downward trend in growth reversed throughout the month, with sales climbing back up to +43.4% (YoY) by the final week (w/c 26 October)
- Compared to a sales fall from +33.0% to +29.9% between weeks 1 and 2, weeks 3 and 4 rose sharply from +32.7% to +43.4% (YoY) respectively
- The conversion rate was +4.0% last month – the lowest seen this year
LONDON UK – November 11, 2020: Just as the growth rate began to normalise throughout September and the beginning of October, online retail sales have spiked once more. As rumours of a second lockdown began to gain strength, the growth in spend between the third and fourth weeks of October soared past the 2019 figures (1.3% and 4.8% YoY), surging from +32.7% (YoY) to +43.4% (YoY) respectively. That’s according to the latest IMRG Capgemini Online Retail Index, which tracks the online sales performance of over 200 retailers.
At a category level, this pattern was echoed in clothing sales, which recorded falling then rising growth of +6.6 (YoY), -0.4% (YoY) and +4.9% (YoY) for weeks 1,2 and 3. The month’s final week (commencing 26 October) then saw online sales surge to a staggering +17.1% (YoY) – the category’s strongest performance since COVID hit. Footwear also finally recorded positive sales growth in the last week of the month, with spend rising by +2.7% (YoY). Meanwhile perhaps in a nod to seasonal change and the demand for outdoor heaters, garden sales continued to soar, with growth of +390.9% (YoY) for the month.
Mirroring the trend in sales figures since lockdown restrictions were put in place, multichannel retailers maintained their advantage over their online only counterparts, recording growth of +62.7% versus +19.6%.
Andy Mulcahy, strategy and insight director, IMRG: “When the first lockdown came in, most of the categories online recorded a massive uptick in demand, with home, garden and electricals all seeing triple-digit growth at some point during the spring. That demand was obviously being driven by the situation – the need to set up a home office, the sunniest spring ever etc. – and it did seem like some of them might run out of steam, but actually it has remained very high as we approach the peak period with little sign of slowing down.
“The upshot is that, provided stock levels hold up, November’s volumes are going to provide a really stern test for delivery. Not only was there a big jump in sales activity in the last week of October – suggesting people had started Christmas shopping earlier than normal – but we could see a huge share of sales brought forward from December too. This will be a challenge to manage but moving so much volume away from Christmas should ultimately prove positive.
Lucy Gibbs, managing consultant – Retail Insight, Capgemini: “October marks another turning point in the turbulent retail calendar this year; online weekly sales growth eased off after summer, however the final week jumped to 43% in anticipation of new lockdown measures. This time, the clothing category appears to be following the trend, also seeing the high weekly YOY uplift in the final week of October, with seasonal weather combined with outdoor meeting rules boosting demand.
“Although we have seen record breaking online growth over the summer months, order volumes were still well below that seen by recent years during peak events such as Black Friday. As non-essential retailers close their doors for the second time,the stakes will be higher: an uplift on online sales orders in double digits on top peak demand will impact already stretched supply channels.
“Retailers can capitalise on learnings so far to reduce the pressure and reassure customers, however a likely differentiator for success will be determined by service levels over the festive period. Will consumer expectations remain as forgiving on longer lead times as we approach Christmas? Or will this trigger a change in promotions and consumer behaviour to help spread the demand over the peak period?.”
-ENDS-
Disclaimer
The IMRG Capgemini Sales Index was adjusted in August 2020 to reflect updated historic figures from our retail panel. Previously reported results have been recalibrated to provide a more accurate view of the market index.
About the ‘IMRG Capgemini Online Retail Index’
The IMRG Capgemini Online Retail Index, which was started in April 2000, tracks ‘online sales’, which we define as ‘transactions completed fully, including payment, via interactive channels’ from any location, including in-store.
*Please note from January 2020 the Index no longer includes data from the travel sector
About IMRG
For over 20 years, IMRG (Interactive Media in Retail Group) has been the voice of e-retail in the UK. We are a membership community comprising businesses of all sizes – multichannel and pureplay, SME and multinational, and solution providers to industry. We support our members through a range of activities – including market tracking and insight, benchmarking and best practice sharing. Our indexes provide in-depth intelligence on online sales, mobile sales, delivery trends and over 40 additional KPIs. Our goal is to ensure our members have the information and resources they need to succeed in rapidly-evolving markets – both domestically and internationally. www.imrg.org
About Capgemini
Capgemini is a global leader in consulting, digital transformation, technology and engineering services. The Group is at the forefront of innovation to address the entire breadth of clients’ opportunities in the evolving world of cloud, digital and platforms. Building on its strong 50-year+ heritage and deep industry-specific expertise, Capgemini enables organizations to realize their business ambitions through an array of services from strategy to operations. Capgemini is driven by the conviction that the business value of technology comes from and through people. Today, it is a multicultural company of 270,000 team members in almost 50 countries. With Altran, the Group reported 2019 combined revenues of €17billion.
Visit us at www.capgemini.com. People matter, results count.
