Online retail shopping has increased stronger than expected, with a growth of 19% year-on-year, the biggest growth since 2014.
The IMRG Capgemini eRetail Sales Index has revealed a 20 month high, contributed by increased discounting and warmer weather throughout July.
High discounting by retailers across the board may have contributed to the strong performance of the Index, with the average basket value of goods purchased online falling from £80.52 in June 2016 to £78.39 a month later.
The Index growth was also partly fuelled by a resurgence in sales growth for multichannel retailers, who recorded a growth rate in online sales of +19%, a 13-month high. This was supported by continued strong growth for online-only retailers where sales grew +18% year-on-year, excluding travel retailers.
The discounting may have been influenced partly by a need to compete with Amazon Prime Day, which took place on 12th July. Amazon announced that customer orders surpassed Prime Day 2015 by more than 60% worldwide.
Doug Gurr, UK country manager, Amazon: “Prime Day was a record-breaking success for small businesses selling on Amazon, with more than 30% of UK Prime Day deals from independent Marketplace sellers.
This surprise revival for multichannel retailers follows a sustained period of lower growth compared with their online-only counterparts.
IMRG and Capgemini reported last month that the gap between the two groups had reached a record-high in June this year, when growth for the online-only retailers was a full 23 percentage-points ahead of the rate for the multichannel retailers, compared with June 2015.
Weather boosting sales
In a warmer-than-average July, with 90% of average sunshine, consumers headed online to renew their summer wardrobes. The overall clothing sector grew by 22%, while sub-sector including accessories (+33%), footwear (+24%), lingerie (+31%) and womenswear (+21%) all recorded above average yearly growth.
In wider sectors, home grew by 50% year-on-year, while the garden sector grew +39%. The only sector to see a decline was beers, wines and spirits, which fell by a marginal -1%.
IMRG are expecting to see a double-digit growth during August, due to a weak performance for the same month last year.
Tina Spooner, chief information officer, IMRG said: “2016 is proving to be a tough one to predict – particularly given the referendum result and the fact we have yet to record any significant impact from it in the Index so far, while some other economic indicators have already revealed some degree of impact.”
Bhavesh Unadkat, management consultant in retail customer engagement design, Capgemini: “Impressive sales from the multichannel retailers saw them drive growth and undoubtedly helped the month’s figures.
“The figures were also bolstered by an encouraging economic position which increased consumer confidence, alongside, of course, some great weather.”