UK online retail sales were up +12.6% year-on-year in October, according to the IMRG Capgemini e-Retail Sales Index.
This was lower than both the average YoY growth rate of 14.3% for the last three months, and the five-year October average of 14%, something of a surprise given the High Street’s poor performance in October would typically have suggested a boost for e-commerce sales, indicating a pre-Black Friday lull. Further evidence of this could be seen in the average conversion rate, which stood at 4.4%. This was higher than that in October 2016 (4%) but -0.4 percentage points lower than the three-year (2013-2015) average of 4.8%. On a positive note, October’s Average Basket Value (ABV) was the highest for October in nine years – ringing in at £94.
Bhavesh Unadkat, Principal Consultant in Retail Customer Engagement, Capgemini, says: “October was a bleak month for retail. You would have expected e-commerce to benefit from a more price sensitive customer, yet the interest rate hike, the bad weather and anticipation of Black Friday did little to help the cause - covering up October’s truly underwhelming performance if anything. These coming three months, October through to December, will be important to view performance as a whole and be indicative of whether people are waiting longer before they spend on Christmas. Black Friday and the Autumn Budget are both important factors in this, so hopefully we will see Philip Hammond outlining some form of catalyst to boost consumer confidence this November.”
Justin Opie, Managing Director, IMRG, comments: “As the fall in conversion rate suggests, shoppers have been well trained to expect the best deals to be available during the Black Friday period, so we can anticipate that November will convert a degree of that early research into sales – last year, the conversion rate was 5.1% in November, while it was just 4% in October. It was surprising to see electricals break its six-month pattern of negative growth in October – with Black Friday looming very large in the public consciousness, we may have expected that trend of decline to continue as shoppers held off on any major purchases, anticipating a much lower price at the end of November. The release of a must-have item like the new iPhone model could have influenced behaviour, but it’s likely that the wide availability of discounting last month was also determining.”