The growth in online retail sales had to slow sometime, and that time was Christmas 2018 – at least that is the conclusion of the Capgemini IMRG eRetail Sales Index.
Sales growth of 3.6 per cent year-on-year in December was an all-time low. Growth of 3.6 per cent would be considered perfectly respectable in many sectors, but not online retail. In the first half of 2018, growth was 16 per cent up on the year before. However, lacklustre monthly performances in the second half meant growth fell to 8.4 per cent.
IMRG’s strategy and insight director Andy Mulcahy said: “The first half of 2018 was actually very strong for online retailers – it resisted and arguably benefitted from the tough climate that impacted trade for store retail. It is only the second half of the year where the suppressed confidence and spend, evident in so many other sectors, has spread to online retail; the macro-economic situation must be exerting pressure here, particularly with Brexit now entering its crunch period in Q1 2019.”
But while online retail sales might have taken a dip, there is evidence that click and collect is growth dramatically as the chosen delivery option for many consumers.
A study by GlobalData found that the click and collect market is set to growth by 45.8 per cent over the next five years to reach £9.8 billion.
This is music to ears of Tim Robinson, chief executive of Doddle: “So many indicators point to 2019 being tipping point for click and collect.”
He highlights the fact that click and collect can draw consumers into stores where they can make additional purchases.
“Over a third of the customers that make incremental purchases after visiting our click & collect counters in Debenhams are new to the brand. In these tough times for the retail sector, that’s gold.”
However, GlobalData’s Emily Salter warns: “The growing number of retailers closing stores and implementing CVAs will reduce the availability of collection points, increasing usage of alternative delivery options. Additionally, delivery saver schemes encourage customers to predominantly use home delivery as express deliveries are included in the vast majority of schemes, driving up usage of express home delivery.”
Latest figures from the British Retail Consortium show a return to growth in January after the disappointment of December. Total retail sales were up 2.2 per cent year-on-year. However, BRC is cautious about the prospects for further growth.
In a tough market, getting the delivery offer right can make the difference between winning or losing an order. It would be a foolish retailer that ignored the potential of click and collect to help boost sales.
