UK ecommerce growth slows to single digits for first time


UK online sales grew just 9% in March and 11% on February 2015, meaning that the Index has recorded only single-digit growth for each month in Q1 2015 – the first time this has happened in any quarter.

The data, from the IMRG Capgemini e-Retail Sales Index reveal that during Q1 2015 online sales grew by just 7% compared to Q1 2014, however, this is on the back of a strong performance in Q1 last year when annual growth stood at 17% – the strongest Q1 growth seen since 2011.

Key findings:

• Index records single-digit growth for each month in Q1 2015
• All growth being driven by mobile sales; up 38% in Q1 2015 compared to Q1 2014
• Q1 year-on-year growth up 7% compared to 17% last year

The growth is largely being driven by mobile sales – those purchases made on either a tablet device or a smartphone – up 9% on the previous month and 46% on March 2014. During the first quarter of 2015, mobile saw an increase of 38% on the same period last year.

Online sales in March were boosted by Mother’s Day, with items within the gift sector up 20% year-on-year and reaching an impressive 48% peak during the week leading up to it (w/c 9th March). Travel reported a similarly healthy performance, with 18% annual growth compared to just 6% recorded at the same time last year.

Adgild Hop, Principal, Head of Retail Consulting, Capgemini, commented: “After a rather unsteady start to the year, March’s return to growth, albeit a relatively conservative one, will be much welcomed by the UK’s online retailers.

“The influence of sales via a tablet or smartphone, which are in effect the main vehicles for growth in the index, is a clear indication of just how valuable mobile platforms have become to the retail customer experience. If it weren’t for mobile, the overall trends for e-retail would be neutral at best. Retailers therefore need to expect that as online propositions become increasingly commoditised, the secret to differentiation and competitive advantage increasingly resides in the mobile customer experience.”

Tina Spooner, Chief Information Officer, at IMRG said: “There are a number of factors that may be influencing this apparent slowdown in online retail sales growth – such as a maturing market or uncertainty around the upcoming election. One particular point that does stand out from the latest figures however is that travel growth for Q1 2015 (+19%) was the strongest we’ve seen for that quarter since we started tracking this sector in 2009 – this suggests that consumers may be feeling more confident in how the economic recovery is progressing and spending out on holidays again, diverting that potential expenditure away from retail sites.

“This may be further evidenced by the Q1 performance of the high ticket item sectors electricals (+1%) and home and garden (-6%) as people may be investing their money in more entertainment-focused activities rather than home improvement.”

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