Online retail sees lowest November growth in seven years

In Industry Comment, Industry News On

UK online retail sales suffered its worst November growth since 2011 last month, coming in at just +8.1% year-on-year (YoY), as Black Friday discounting failed to rejuvenate consumer spending across the month and relieve the recent struggles for UK retailers, according to the latest Capgemini IMRG e-Retail Sales Index.

November fell below the three- (+8.3%), six- (+10.5%) and 12-month (+12.2%) sales growth averages, as the market experienced its lowest ever growth for a Black Friday week. While online retail appeared resilient to the struggles experienced on the high street during the first half of 2018 (when growth was up 16% vs the first half of 2017), it is apparently now being impacted by the tough trading climate.

IMRG strategy and insights director Andy Mulcahy commented:Black Friday was underwhelming from a revenue perspective this year and there are multiple reasons why shopper spend may not have responded as well as may have been expected. There is economic and political stability potentially impacting shopper confidence, plus the possibility that people might be becoming fatigued with the event – a factor compounded by negative stories released in the run-up, such as those by Which?.

“One thing that is clear from our research is that heavy discounting had been going on far in advance of Black Friday, which lessens retailers’ capacity for grabbing attention by going into sale. Did the sheer scale of the discount rates suppress revenue? Or is the overall peak spend getting more evenly spread throughout the Christmas build-up this year, due to Black Friday falling so early in November before many people had been paid? It’s a very complicated story this year, but the duration and depth of discounting rates are likely to be very significant.”

Capgemini principal consultant in retail customer engagement Bhavesh Unadkat added: Despite high conversion this month where all weeks saw an increase in orders, the drop in average basket value has impacted the sales growth, suggesting that extended promotions have had an impact on revenue this year.

“The evolution of Black Friday has shaken up the Christmas sales landscape over the last decade, however, the discounting snowball effect may be losing momentum as retailers try to regain control and extend the demand across the festive period.  We saw a mix of strategies from the retailers; from kick starting offers early in the health and beauty sector, compared to a number of high-profile retailers who made a stand and pulled out of Black Friday altogether to protect their margins and pricing strategy. December performance and end of year profits will be the true measure of who has gained and lost in the discounting game this year.”

You may also read!

Connect Distribution chosen as Samsung’s appointed domestic microwave distributor

Connect Distribution has been named appointed domestic microwave distributor by Samsung. This allows them to supply independent businesses like

Read More...

Groupe SEB UK appoints new Commercial Director

Groupe SEB UK has promoted Will Yates to Commercial Director of its three power brands Tefal, KRUPS and Rowenta. Will

Read More...

Hotpoint launches microwave promotion with Sistema

Hotpoint has partnered with Sistema to offer consumers a £25 Sistema set. The Sistema sets contains a breakfast bowl,

Read More...

Mobile Sliding Menu

©2018 Innovative Electrical Retailing. Datateam Business Media Limited. All rights reserved.
Registered in England No: 1771113. VAT No: 834 8567 90.
Registered Office: 15a London Road, Maidstone, Kent ME16 8LY