According to the latest IMRG Capgemini Online Retail Index, online shoppers in the UK are browsing but not making purchases. The index, which analyzed sales data from 200 retailers in September, revealed a 12.5% year-on-year decline in total online retail sales. This shows a further drop from the 9.3% decrease in August. However, there was a 2.1% increase in sales compared to the previous month, marking the first rise since physical stores reopened. Despite this increase, sales still fell short of pre-pandemic levels, which would have anticipated a 6% increase.
One possible explanation for this behavior is the ongoing shortage in the supply chain. Consumers may be cautious about making purchases due to rising inflation and higher gas prices. Additionally, the early start of Christmas browsing could be a contributing factor. Shoppers may be exploring available options without making immediate purchases. This is evident from the decrease in the conversation rate, which dropped from 3.9% in September 2020 to 2.8% in September 2021.
Although overall sales declined, the fashion category performed well, experiencing an 11.1% rise in sales last month. This trend is expected to continue for the remainder of the year. On the other hand, health and beauty saw the worst performance, with a 32.7% decline in sales, indicating a sustained downward trend.
Lucy Gibbs, Managing Consultant – Retail Lead for Analytics & AI at Capgemini, emphasized the challenges faced by retailers due to supply chain strain. She highlighted the importance of managing stock availability and customer service levels during the peak trading period leading up to Black Friday and Christmas.
Andy Mulcahy, Strategy and Insight Director at IMRG, noted that many retailers observed an early start to Christmas searches on their websites. He suggested that the relatively low online sales performance in September could be attributed to browsing for ideas, with actual purchases potentially happening in October. If purchasing accelerates early, some retailers might launch their Black Friday campaigns ahead of schedule, leading to an extended sales event.
In conclusion, UK online shoppers are engaging in browsing behavior, potentially influenced by supply chain issues and early Christmas searching. Despite the overall decline in sales, the fashion category remains resilient, indicating positive prospects for the industry in the coming months. Retailers will need to navigate the challenges of the peak trading period and adapt their strategies to ensure stock availability and maintain customer satisfaction.
Useful links:
– BBC: UK online retail sales fall fastest since December 2020
– Retail Gazette: UK online retail sales drop 12.5% in September
