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retail environment

Report highlights sluggish online sales in September

The juggernaut of Internet shopping appears to be slowing down, with UK online retail sales in September growing at their lowest rate - 7.5 per cent year-on-year - since 2014, according to the latest IMRG Capgemini online retail sales index.

This is a concern as physical retail sales have also come under increasing pressure.

Online sales have faltered since England’s World Cup exit in July and the close of the hot summer, and despite a brief uplift around the August bank holiday, growth fell to a new 2018 low in September.

For the third-quarter overall, online retail sales growth was up 10.1 per cent, compared to 17.1 per cent over the second quarter.

The sector which felt the brunt of the fall in spending was clothing, which at just 2.2 per cent year-on-year performed significantly below the five-year average for September of 7.4 per cent.

Meanwhile, gifts spending decreased by 23 per cent year-on-year, in its biggest drop since March 2010, suggesting that wallets have tightened after a high-spending second quarter.

Meanwhile, the index for sales via smartphones continued to grow during September - increasing 16.1 per cent on last year - although growth has slowed considerably against the 55.8 per cent recorded last year, with the market reaching a greater level of maturity.

Sales via tablets continued to plummet, down 22.5 per cent year-on-year compared to an 8.1 per cent increase last year.

Bhavesh Unadkat, principal consultant in retail customer engagement at Capgemini, explained that mobile commerce also dropped to a new low of 1.1 per cent in September following a significant decline in the last two months.

Multi-channel retailers also saw a decline of 11.8 per cent versus last year, compared to 8.8 per cent in online-only retailers.

Andy Mulcahy, strategy and insight director at IMRG, noted that shopper confidence appears to have fallen at a time when numerous retailers are putting out profit warnings and announcing store closures.

“Meanwhile, several retailers have spoken publicly about the scale of discounting that has been active across various retail sites, meaning that the industry is already heavily involved in discounting before we even get near to Black Friday,” he continued.

“The conversion rate was markedly down in September; could it possibly be that people are already browsing for ideas, in the knowledge that Black Friday will inevitably bring heavier discounts?”

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