Online retail sales continued to remain low in October, falling by 11.2% year-on-year last month, according to the latest IMRG Capgemini Online Retail Index, which tracks the online sales performance of over 200 retailers. The figure marks a slight rise on September’s 12.5% decline.

Last month’s slowdown in online sales was once again kicked off by a poor first week, down 12.5% compared to 0.9% during the last week. While the average basket value (ABV) remains high at GBP131 (though down from its August peak of GBP149), the conversion rate has fallen further (+2.9% in October 2021 versus +4.1% in October 2020), suggesting ongoing issues with stock levels, due to the pressure on the supply chain.

Meanwhile, October’s result comfortably beat the three-month (-52.3%) and six-month (-32.6%) averages but fell below the 12-month average (-2.09%). Aligning with pre-pandemic patterns for this time of year, month-on-month sales grew by 11.2%, proving the highest since the high streets reopened in April.

At a category level, clothing was one of the few to record growth with sales up 7.5%.

“October online spending was more subdued than expected this year. Stock shortages and supply chain disruptions gave speculation that customers might start shopping earlier than usual, however, this may also be having a negative effect; conversion is down across the board compared to the last two years 2.9% compared to 4.1% in 2020, with stock outs and lack of stock depth contributing to customers leaving the funnel,” says Lucy Gibbs, managing consultant, retail lead for analytics and AI at Capgemini.

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“Consumer confidence has also dropped for a third month in a row as financial concerns build due to increasing inflation and interest rates and climbing Covid rates, providing a cautious backdrop ahead of the peak season this year. Campaigns for black Friday are ready and waiting, however, will these be enough to draw the share of wallet this season?”

Andy Mulcahy, strategy and insight director, IMRG adds: “The potential for Christmas shopping to get underway early this year did not really materialise in October, but it is evident that retailers are certainly trying to get it moving in early November. Of the 317 retailers IMRG is tracking every day, 25 had their Black Friday campaigns live on 3 November versus only 14 on the same day in 2021. In terms of sales performance, it seems to be a mix at the moment, and this may be what characterises peak trading as some are better positioned with their stock levels than others. A poll IMRG ran of 50 retailers on 4 November found that half were seeing activity on their sites ‘below expectation’, while it was ‘above expectation’ for around a quarter. There could end up being quite a sharp divide between who does well and who does not this festive period.”

 

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