Bumper online Christmas

UK shoppers spent over £4.67 billion online in December – an equivalent of £76.67p for every person in the UK – 14.2% up on December 2007, according to figures from the IMRG Capgemini e-Retail Sales Index.

Monthly growth fell for the first time since December 2002 with consumers spending 1.5% less online than in November. This is attributed to record high sales in November, which saw higher than average yearly growth, and the timing of Christmas 2008 where the peak shopping weekend fell on 29th and 30th November.

Supporting research from Capgemini reveals that shoppers are turning to the web to beat the credit crunch, showing how online spend can continue to grow despite static or falling growth on the high street. Whilst traditional factors such as researching the best prices online were reported by almost half (44.35%) of the 2,000 consumers surveyed, it is clear online retail is now part of mainstream shopping behaviour. A third of shoppers (37%) did more than half of their shopping online, with nearly two-thirds (59.9%) spending more online this Christmas than last year.

Sector splits
Consumers looking to stock up on alcohol for Christmas celebrations turned to the internet for the best bargains spending 13% more in December compared to November. Gifts and electricals also saw a marked increase in sales for December – where shoppers spent 7% and 5% more respectively. Although clothing, footwear and accessories saw flat growth compared to November, shoppers spent 32% more compared to December 2007. In contrast, the lingerie and health and beauty sectors saw a decline in sales both month on month and year on year.

Clothing, footwear and accessories is the fastest growing sector – it has consistently outperformed the total market and other sectors throughout 2008. Although the total market for online spending has experienced slowing growth, the clothing, footwear and accessories sector has seen around 30% year on year increases every month for 2008. Capgemini’s polling also debunks the myth that a significant proportion of online garment sales can be attributed to shoppers ordering multiple sizes to return those that do not fit. In fact only 21% of consumers often or always do so. This may relate to the inconvenience of returning items with 20% of online shoppers stating this discouraged them making more purchases online. More shoppers (24%) were put off by the inability to handle items to check quality which trumped worries over security (13%) and the unreliability of delivery services (13%).

Mike Petevinos, Head of Consulting for Retail for Capgemini UK, said: “This is the first recession we have seen where online will play a significant role in mainstream spending. Our research provides further evidence that consumers are turning to the internet as the most efficient way to save money in the downturn. It is also clear that retailers are seizing the potential of the internet to reach shoppers with targeted discounts and promotions. These factors have led to the robust growth rates we are seeing for e-retailing as a whole.”

James Roper, Chief Executive and Founder of IMRG, said: “It is becoming apparent that the recession is accelerating the rate at which the internet is impacting the retail sector. The traditional retail model in which stock is held in an outlet for collection by the consumer is giving way to a hybrid model that emphasises the store’s role as a display area and leisure destination, and the value of both these aspects diminish in a recession. Brands that are nimble in a cross-channel environment give their customers a more efficient, easy-to-use service and are rewarded with increased conversion rates and larger average shopping baskets. So it’s good to see more and more retailers participating in the Index, as it gives us a clearer view of the market’s dynamics as well as providing them with key intelligence with which to tune their performance.”