E-commerce sales growth continues to shrink

Monday, June 26, 2017 - 11:47 by Simon Crisp

New stats released last week by IMRG indicate that although sales made online were up by 10.2 per cent last month, the rate of growth in this marketplace has dropped to a low not seen since 2015.

Internet Retailing reports that the data suggests some segments are falling short of expectations, with analysts blaming the uncertainty generated by the hastily called general election for the muted levels of spending.

There were even some product categories which saw a decline in sales compared with May last year, such as electrical items which were down by 8.6 per cent. This is the first time in the history of shopping online that there has been a tangible dip in sales of a particular type of product, which may be a sign of troubled times ahead.

IMRG spokesperson, Andy Mulcahy, said that consumers were not as confident in May this year because of the inevitable disruption caused by the election. He predicted that this would lead to stronger growth in June, as a similar trend was followed in the wake of last year’s Brexit vote.

Another factor that analysts believe is contributing to the constriction of e-commerce growth is inflation, which is resulting in rising costs of many products as retailers lumber their customers with the spikes in wholesale prices.

Smartphones continue to drive online sales, with mobile-based purchases rising by 46.2 per cent in May. Meanwhile tablets continue to tumble out of fashion, with a 4.9 per cent annual dip in their use for online shopping.

The decline in tablet sales has long been charted, as smartphone screen sizes have continued to rise and thus the need for a separate gadget with a marginally bigger display is no longer as pressing for most shoppers.