£6.8bn spent online at Xmas

Chancellor George Osborne may be keen to use the snow as an excuse for the UK’s economic woes, but according to a new study, Brits spent a record £6.8bn online during December – equivalent to £111 per person.
The IMRG Capgemini e-Retail Sales Index says sales were up by 7 per cent on November and by 25 per cent on December 2009, with the Index value reaching a record high.
A total of £58.8bn was spent online in 2010, which resulted in the Index increasing by 18 per cent, far outstripping the original prediction of 13 per cent. For 2011, IMRG and Capgemini have predicted the Index will see a further 18 per cent growth, with total e-retail sales estimated to be worth £69bn.
The December figures showed that despite gloomy predictions, online retailers had a successful Christmas, resulting in an above average year-on-year growth in nearly all sectors.
The report cites two major factors: the impending increase in VAT and the coldest recorded December in the UK for 100 years.
This trend had a positive impact for all online traders, including those with a multi-channel proposition; House of Fraser reported 120 per cent growth in online sales compared to the same period the year before. Similarly, John Lewis and Marks & Spencer reported exceptionally strong results.
In terms of specific sectors, the harsh conditions had an inevitable impact in sales for clothing, footwear and accessories. As the country looked to wrap itself up in winter coats and chunky scarves, the sector saw a year-on-year increase of 40 per cent: the strongest growth for this sector for 19 months. Clothing retailers also experienced a massive 50 per cent leap in conversion rate, suggesting consumers are not just surfing the net to window shop, but researching the best price and placing an order.
Alcohol, perhaps unsurprising given the festive and party season, saw the largest growth, boasting a massive month-on-month leap of 32 per cent. What’s a little less expected is the year-on-year growth as the sector saw a significant 36 per cent increase from December 2009.
James Roper, chief executive at IMRG, said: “December saw an incredible jump in online sales as a result of the weather conditions and it’s reassuring to see that despite the coverage of delivery problems, consumer confidence was not affected. Growing confidence and reliance on e-retail during times of adversity, whether that’s harsh weather conditions or belt-tightening as a result of the economy, has been reflected in the impressive growth throughout 2010.”
Chris Webster, head of retail consulting and technology at Capgemini, added: “Online sales in December have grown again off the back of a very impressive November. This is down to two main reasons. Firstly, the spike in sales can be attributed to the season; not only is it traditionally the strongest month for retail but coupled with the heavy snow fall clearly led to many consumers staying at home to do their Christmas shopping. Secondly, the ongoing trend of consumers putting down the car keys and turning on their computers is only set to continue particularly as consumers use the power of the web to make their money go further as the economy recovery remains fragile.”

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