Kenneth Guillame, Big4.com Staff Reporter
The IMRG e-Retail Sales Index prepared by Capgemini has recorded the lowest annual growth rate in the history of this Index. Growth rose by only 5% from January 2009 to January 2010 which is a remarkably low figure. UK shoppers have spent around £4.3 billion online in this month. The sales figures were higher in December 2009, which also held off heavy discounting.
The monthly growth has reportedly fallen by 22% from December 2009 to January 2010. This is however the usual trend of sales figures falling right after Christmas but the decline is greater than in the last few years.
Chris Webster, Vice President, Retail Consulting and Technology, Capgemini, said: “While annual growth for e-retail was slow in January, we should feel good in the fact that December was a very strong month for the industry. Last January, e-retailers’ sales were buoyed up by heavy discounting and promotions that were necessary to sell stock left over from poor Christmas trading resulting from the impact of the recent move into recession”.
Tina Spooner, Director of Information, IMRG, said: “The weaker yearly growth in the UK e-retail market during January follows a strong December when online retailers were clearly well prepared for the festive season, indeed December 26th and 27th saw the highest sales for all of 2009. Less retailer discounting due to well planned stock levels and the increase in VAT equally appear to have had an impact on the online retail sector during January.”
Even though the performance was very strong during Christmas, beers, wines, and spirits sector showed a very sharp decline where customers were seen to spend 58% less than they did in December. This was a result of going in for a detox after the December splurge. Other sectors like clothing, footwear, and accessories were the ones which drove the market throughout the previous year saw a yearly growth of 10% in January 2010.
The startling fact is that the e-Retail Index for multichannel and online retailers fell, as compared to the previous month. However the multichannel retailers’ online sales fell double times the rate (27%) of pureplay retailers’ sales (14%). This point at the fact that multichannel retailers have an advantage during pre-Christmas since they have a street presence while this advantage is not specifically beneficial post Christmas when no last minute deliveries are required.
Capgemini is one of the world’s leading service providers and consultants in business processes to clients across the world. They are present in more than 30 countries and have more than 90,000 employees across the world.