UK online retail sales have been growing faster than predicted at 15.1% for the year to date according to data released by IMRG and Capgemini. The start of year forecast was 11%. The two organisations have now revised their projections to 15% of growth by the end of the year. Up to now growth has been slowing every year but this appears to have changed.
IMRG and Capgemini now expect strong growth to continue into the final quarter peak season as shoppers make purchases before 2017 ahead of what is expected to be a tough year economically as the effects of Brexit kick in. Many retailers are expected to raise their prices next year with currency fluctuation induced inflation.
Black Friday 2015 was noted as a largely internet only phenomenon with high street shops receiving lower footfall due to many shoppers attempting to avoid the crowds and shop digitally. IMRG and Capgemini seem to believe that this change in shopping pattern seems to have extended into 2016. Online sales growth has continued to grow in double digits for the last 12 months, including last November’s Black Friday event.
Brexit seems to have had little impact on sales growth – Q3 recorded growth in the region of 17%, the highest quarterly sales growth since Q1 of 2014.
Justin Opie, MD at IMRG, commented: “The last time we recorded a declining trend in annual growth rates was between 2010 and 2012, but the emergence of tablet devices reversed that – extending the times and locations in which people could browse retail sites and making 9pm a new daily peak as people used them on the sofa in front of the TV. It may be that smartphones are now helping to provide a similar boost – sales growth for these devices has been very strong over the past year or so, up 82.8% year-to-date (Jan-Sep) while for tablets it is just 5.5%.”
Bhavesh Unadkat, Management Consultant in Retail Customer Engagement Design at Capgemini, added: “There is an uncertainty that surrounds Brexit in terms of its impact, however what is pretty clear is that any impact won’t be seen in its fullest for months to come. With this in mind it has been another stupendous year for e-retail so far, with performance up 15% on the year, proving consumer confidence remains strong.
“The end of the year will be boosted further by Black Friday and peak season. Indeed, when considering the amount of planning and preparation retailers have made this year compared with last year, both without a doubt will be record breaking. The cherry on top could be the weakness of the pound as those looking for summer sun may decide to stay at home and reinvest that spend into the UK.”
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