Fashion emerged as a surprising success story in the online retail sector during November, a month of historically low sales growth in the UK. The latest IMRG Capgemini Online Retail Index revealed a year-on-year decline in online retail sales of 19.8% during November, the lowest growth rate in the Index’s 21-year history. However, despite falling short of the anticipated 50% growth for this time of year, there was a month-on-month sales increase of 40.4%.
The performance of over 200 retailers has been tracked by the Index, which expected some underperformance in November 2021 following a strong showing in November 2020. However, the comparison to October is particularly worrying, as the start of the festive shopping season and the occurrence of Black Friday should have generated more positive results.
Further analysis of the data revealed that consumers are making fewer purchases and spending less when they do. The conversion rate saw a year-on-year decline of 20% to 3.3%, while the average basket value fell to £123, compared to its peak of £149 earlier in 2021. Multichannel brands suffered the most, with their sales declining by 23.4% compared to online-only retailers, whose sales dropped by 13.4%.
Interestingly, every retail category apart from clothing experienced significant declines, with gifts seeing a particularly sharp decline of 46.4%. Lucy Gibbs, Managing Consultant – Retail Lead for Analytics & AI at Capgemini, highlighted supplier shortages and delivery disruptions, along with a return to in-person shopping, as contributing factors to the decline in online sales.
Andy Mulcahy, Strategy and Insight Director at IMRG, expressed concern over the poor performance in November, specifically noting a decline in website traffic. Mulcahy suggested that the decrease in online visits could be attributed to consumers favoring physical retail locations, particularly with the potential for another lockdown looming. He predicted that the upcoming weeks would be crucial in determining the overall impact on trading figures, as people may opt to avoid crowded places to minimize the risk of having to isolate during the holiday season.
Despite the challenges faced by the online retail industry in November, the fashion sector defied expectations by experiencing modest growth. While the overall decline in sales raises concerns, industry insiders will be closely monitoring consumer behavior and market conditions in the coming weeks as the holiday season unfolds.
Useful links:
Cross-Border E-commerce
Retail Marketing Strategies
