The latest IMRG Capgemini Online Retail Index tracks the online sales performance of over 200 retailers.
Key findings:
• Online retail sales fell by -9.6% Year-on-Year (YoY) last month – compared to June’s -14.1%
• Combined with a better-than-average Month-on-Month (MoM) dip of just -4.4% despite the end of restrictions, this could signal a return to stability in the near future
• July’s performance continues to fall well below the 6-month (+13.44%) and 12-month (+29.9%) averages, but beats the 3-month average of -10.63%
• Beers, wines & spirits had another standout month at +29.9% growth, with health & beauty fairing less well but showing signs of recovery
• While still doing significantly better than their multichannel counterparts (-12%), online only retailers saw their sales growth dip into negative figures for the first time since the pandemic began (-4.6%)
The easing is particularly apparent if you look at the Week-on-Week (WoW) breakdown, with the first week of July down -14% versus just -5.5% in the final week. Other encouraging signs could be seen in the Month-on-Month (MoM) figure, where a drop of -4.4% was lower than would be expected between June and July according to pre-pandemic patterns, and in the Average Basket Volume (ABV) which reached its highest total spend for 2021 at £134 – up a staggering 60% against July last year.
At a category level, many continue to report negative YoY growth due to the soaring rates recorded in 2020. However, with the removal of restrictions and consumers returning to social gatherings (plus England being in the final of the Euro 2020 football tournament), beers, wines & spirits sales shot up once again by +29.9%. At the other end of the spectrum, health & beauty sales spiraled further into the negative at -36.1% – though WoW figures had risen to -9% by the end of July.
Andy Mulcahy, strategy and insight director, IMRG, said: “In July 2021, month-on-month (MoM) growth was ahead of where it usually is at this point of the year; with the amount spent online declining -4.4% against June, whereas -8% was typical in 2020 and 2019. For the previous three months, the MoM rate has tracked below where it would normally be as shopper spend has been redistributed across other areas following the phased easing of restrictions.
“Perhaps the ‘pingdemic’ has played a role here, as so many people were forced into isolation, but it’s also tempting to suggest that we might be starting to see what the much-feted ‘new normal’ will actually look like from a retail perspective. If that MoM measure is starting to plot the established trading patterns that naturally go up and down at various times of year, the question of how much volume will stick online following the pandemic will have been answered.”
Lucy Gibbs, managing consultant – Retail Lead for Analytics & AI, Capgemini, saidgv: “July online performance continues to be dampened against the highs of last year (-9.6%), with many categories in the negative, though overall performance is up 38% versus 2019. Beers, wines and spirits was notably up +29.9% this month as the Euros and other sporting events gave cause for celebration and commiseration, alongside newfound freedoms for social gatherings. Higher order volume growth than the previous month and a lower basket value also indicates that the increase in overall event-based purchases have driven the positive alcohol sales this month.
“On the other hand, health and beauty saw the largest decrease in sales performance (-36%), compared to last year where home treatments and skincare products were driving a lot of the demand. It will take a while to realise the impact of the restrictions easing as we gradually step out into the ‘new normal’. Some categories are likely to maintain online behaviours better than others, where newfound convenience versus the missed ‘hands-on’ in store experiences and service is a differentiator.”
About the ‘IMRG Capgemini Online Retail Index’
The IMRG Capgemini Online Retail Index, which was started in April 2000, tracks ‘online sales’, which we define as ‘transactions completed fully, including payment, via interactive channels’ from any location, including in-store.