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Online retail sector still healthy despite slowing growth; New figures from the IMRG Capgemini e-Retail Sales Index reveals nearly GBP200 billion spent online since inception of the index in 2000.(M2 PressWIRE Via Acquire Media NewsEdge) - Online sales up by 14% compared to April last year, however growth slowing and monthly sales fall by 2% - First negative monthly growth for April for clothing - Sales of beers, wines and spirits rise by 10% because of warmer weather and the looming budget - Total of GBP200 billion spent online since the inception of the index 9 years ago Latest figures from the IMRG Capgemini e-Retail Sales Index reveal that sales grew by 14% compared to April 2008. While online retail is still expanding, figures from the last few months have shown that this growth is slowing as the market matures and consumers spend cautiously. Yet UK shoppers are spending GBP10 more online per visit compared to a year ago despite recession - the average online basket size has grown from GBP121.69p in April 08 from GBP131.76p last month. Ninth Anniversary Since the launch of the index in April 2000, UK internet shoppers have spent an estimated GBP200 billion online, with a number of trends being established: - Between 2006 and mid 2008 the total e-retail market was expanding, and whilst still expanding in the second half of 2008 and 2009 year-to-date e-retail sales have been growing at a much slower rate - Of the older, more established e-retail sectors, clothing and electricals have consistently shown positive year on year growth, whilst the beers, wines and spirits sector has recently started to show evidence of the e-retail market potentially starting to contract; - Of the newer sectors, accessories and footwear (sub-sets of Clothing) show strong year on year growth, whilst the lingerie sector shows evidence of contracting. Mike Petevinos, Head of Consulting for Retail for Capgemini UK, said: 'The e-retail industry continues to perform well during the recession with year on year growth at around 15% being achieved consistently over the last 10 months. We are also seeing growth in the average basket value with UK shoppers spending GBP10 more online per visit compared to a year ago. It is, however, clear that the online market is maturing, with seasonal fluctuations becoming more noticeable in certain sectors as they are no longer obscured by the 50% plus year on year growth rates of the past.' April sector splits Sales of beers wines and spirits rose by 10% in April compared to the previous month as the looming budget spurred people on to stock up on alcohol before the increase in taxes. April's above average temperatures also appear to have had an impact on the number of early barbeques and Spring-time drinking. The gifts sector saw the largest monthly fall (-51%), as consumers reigned in their spending on loved ones after Mother's Day in March. The clothing sector also fell by 2% compared to the previous month. Although this sector has seen sustained growth during the recession, there has been evidence in the last three months that the growth rate is slowing. The sector has seen negative growth for the month of April for the first time in the history of the Index. A year on year increase of 17% is also below the average yearly growth for the clothing sector in the last 12 months. For instance yearly growth in April 2008 was 30%; in April 2007 it was 54% and 2006 saw yearly growth of 39%. Sector % Change Month on Month % Change Year on YearTotal Market -2% 14%Beers, Wines and Spirits 10% 1%Clothing, Footwear and Accessories -2% 17%- Accessories -4% 59%- Footwear 3% 17%Electricals 8% 22%Gifts -51% 2%Health and Beauty 0% 10%Lingerie 2% -26%Tina Spooner, Director of Information at IMRG concluded: 'When we entered the 21st Century internet shopping was in its infancy. Nine years later e-retail has not only become a channel of retail choice for consumers, but a way of life for many. Since 2000, internet shopping has soared by over 5,000% with UK consumers spending an astounding GBP200 billion during this period. Internet shopping is clearly the bright spot in the UK retail sector but this industry is still young and has great potential for further growth.' Notes to Editors About IMRG IMRG (Interactive Media In Retail Group) is the industry body for global e-retail. Formed in 1990, IMRG is setting and maintaining pragmatic and robust e-Retail Standards to enable fast-track industry growth, and facilitates its community of members with practical help, information, tools, guidance and networking. Consumers can be confident when dealing with IMRG Members because all have committed to operate using methods that are Honest, Decent, Legal, Truthful and Fair, and have undertaken to not bring the industry into disrepute. The strength of IMRG is the collective and co-operative power of its members. About Capgemini Capgemini, one of the world's foremost providers of consulting, technology and outsourcing services, enables its clients to transform and perform through technologies. Capgemini provides its clients with insights and capabilities that boost their freedom to achieve superior results through a unique way of working, the Collaborative Business Experience. The Group relies on its global delivery model called Rightshore , which aims to get the right balance of the best talent from multiple locations, working as one team to create and deliver the optimum solution for clients. Present in more than 30 countries, Capgemini reported 2008 global revenues of EUR 8.7 billion and employs over 92,000 people worldwide. About the 'IMRG Capgemini e-Retail Sales Index' The IMRG Capgemini Index tracks 'online sales', which we define as 'transactions completed fully, including payment, via interactive channels' from any location, including in-store. These sales are predominantly internet-based today, but the Index remains ready to record e-retail sales conducted via whatever interactive channels the market may embrace in the future. Over ninety e-retailers regularly contribute data to the IMRG Capgemini Index, including Airport Parking & Hotels Ltd, Adili.com, Arcadia Group (Burton, Top Man, Top Shop, Dorothy Perkins, Evans, Wallis, Miss Selfridge), ASOS.com, Beautique.com, BeCheeky.com, Binends.com, Black Essentials, Blacks, Boden.co.uk, Boohoo.com, Boots Direct, Brora, Buyagift.com, Carphone Warehouse, Charles Tyrwhitt, Cloggs, Comet, Co-operative Travel, Crocus.co.uk, Dabs.com, Damart, Daxon, Debenhams, Dobbies, e-flowersUK.co.uk, Ethical Superstore, Figleaves.com, Firebox, First Choice, Freemans Grattan Holdings, Furniture123, Game.net, Gameplay.com, Getting Personal.co.uk, GreatValueJewellery.com, Greenfingers.com, Home & Cook, Interflora, JD Sports, J D Williams, Jack Wills, Jason Shankey, John Lewis Partnership, La Magia, La Redoute, lastminute.com, Lighting-Direct, Lookfantastic.com, M and M Direct, Made in Sheffield, Marks & Spencer, Millets, Monster Travel, Musto, Naked Wines, New Look, Next, Peacocks, Perfect Handbags, PetPlanet.co.uk, PIXmania, Prezzybox.com, QED-UK, QVC, R C Roland, Redcats UK, Redfoot Revolution, Retro36, Richer Sounds, Shoe-Shop.com, Shop Direct Home Shopping, Schuh, Serenata Flowers, Shudoo, Slurp.co.uk, Sunshine.co.uk, Tesco.com Wine, Tesco Electrical, The Fragrance Shop, The Health Supermarket, The Jewellery Channel, The Sunday Times Wine Club, TUI UK, Turton Wines, Vertbaudet, Virgin Vie at Home, Waitrose, Wallace Sacks, Wilkinson Hardware & Wine Hound Quotes from retailers: Christian Robinson, MD of Firebox.com comments: 'E-retail has dramatically evolved since the IMRG Capgemini Index was originally launched in 2000, due in no small part to technological advances over the last decade. Back in 2000, the average UK internet user was browsing the web via a 56k dialup connection and viewing web sites in low resolution, low-tech web browsers making content such as additional images and video tricky to provide. Fast forward to 2009 and broadband penetration has grown to over 95% of internet users - shoppers can finally experience the additional images, product video and other rich multimedia content that help them fully visualise the products they want to buy. When we originally launched Firebox.com our brand was targeted at the average internet user who was online at that time: young, tech-savvy males. As internet usage has exploded in the last 10 years the demographic of the average internet user has also changed - and so the Firebox brand has adapted and expanded to encompass a much wider audience. Far from being the exclusively male-focused retailer we were in 2000, the Firebox customer base today is split roughly 50/50 in terms of male/female shoppers, and our product range has grown to include quirky, unique gifts appropriate for all ages. In the last ten years new marketing channels have launched, grown and come of age. The Firebox affiliate programme was the first of its kind to launch in the UK, through UKAffiliates (now DGM). Back then we faced the challenge of recruiting affiliates and educating web professionals about the viability of the model; now the industry stands alone in its own right. Mobile channels are finally beginning to drive meaningful sales for online retailers, and in the last couple of years in particular the social web has really started to dramatically impact how consumers discover and connect with their favourite products, services and brands.' Gary Berg, Managing Director of Lighting Direct comments: 'Lighting Direct first took our first steps in e-retailing back in 2002 which led to a massive transformation of the company. We started as a business selling light bulbs and tubes to commercial end users with GBP100,000 a year turnover. This was not web based and we had to rely on regular advertising methods to promote the business. Along the way we started to sell some light fittings and this led to the creation of a tiny web site with about 50 products. With a large investment in online advertising we are now at almost GBP2m turnover with over 6,000 products and still rising. Without a shadow of a doubt e-retailing has turned the fortunes of Lighting Direct around to a position that would have been impossible to attain without it. The IMRG Capgemini Index has been very useful in showing online shopping trends which helps us to draw comparisons on how our own growth compares with that of our own sector and online trading as a whole.' For privately owned Prezzybox.com - who launched in 2000 - growth has been organic, managed and consequently relatively steady. 'We've grown at a steady pace and therefore have managed our growth, structuring the company and our requirements accordingly' says MD Zak Edwards. 'We've seen a number of our competitors come into the market place in a flurry of costly marketing activity and haven't had the staying power, company infrastructure or the finances to sustain this growth and consequently they've not stayed around for very long. The companies who have been successful in the main appear to have grown at a sensible rate which can be managed by their infrastructure'. 'E-retail has come on hugely since 2000. It's always been a fast paced business which is both proactive and reactionary, but with the introduction of social media and thus customer interaction, this has stepped up another notch. Nowadays, successful e-retailers have to engage their customers on both a corporate and personal level. No more are users simply customers, they are an integral part of the business and instrumental in that companies success'. Alison Wade, Head of Marketing at Buyagift.com, said: 'Here at Buyagift.com we are always thinking of new and innovative ways to engage our customer base. With the recent addition of a blog to our site and the constant updating of product videos we try to make sure that the customer is kept entertained and well informed throughout their shopping experience. This installs confidence in the consumer and encourages repeat business which is paramount to the success of our business. With sales 28% up for April compared with April last year, things are looking good for Buyagift.com. Sales during 2008 were up 28% on 2007 and we are seeing steady growth as 2009 moves forward. With Gift experiences providing escapism for the consumer the appeal of these gifts are high in these turbulent economic times.' Cameron McLean, PayPal's general manager for UK merchant services, said: 'IMRG Capgemini's index has charted a massive growth in online sales over the last nine years. This period almost exactly coincides with PayPal's first 10 years. We've become an established part of the retail and business landscape over the past decade, and now have over 22 million accounts in the UK alone. While the last nine years have seen many changes in the world of online retailing, one thing hasn't changed: the recipe for business success. Our own research found that most consumers simply want a secure website that is easy to use. The retail winners from the continuing online shopping boom will be those that understand this intriguingly simple formula. Over the past decade, PayPal has allowed people to do something that few ever dreamed possible 10 years ago - send and receive money all around the world through the click of a button. The next decade will see online sales taking an accelerating increase in share of overall retail spending - boosted by consumers increasingly using their mobile phones to search, shop and pay.' ((Comments on this story may be sent to [email protected])) (c) 2009 M2 COMMUNICATIONS |