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e-Retail Growth Rate Not Impressive, But Don't Worry

01 March 2010 - 13:57 by Mike Price

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The IMRG Capgemini e-Retail Sales Index has what appears to the surface to be some bad news for online retailers. However, closer examination reveals this to be far from negative.

This year's annual growth rate has been the lowest since the index began, with like-for-like growth rising by only five percent this January compared to January 2009.

However, it is far from all grim tidings with e-retailers patting themselves on the back after a successful Christmas period, in which they had little need to discount too heavily.

The Sales Index reported that spending by shopping online for January 2010 was at £4.3 billion, a fall of 22 per cent from sales the month before, in December 2009. Although a decline in sales is typical after the Christmas rush, the decline was sharper than previous years, with the effect having been less noticeable last January.

Experts have played down the impact of the figures, however, pointing to a couple of factors that might well help to explain things. Firstly, retailers prepared very well for this year's Christmas season. Sales were high, with December 26th and December 27th last year seeing the highest online shopping sales of 2009. e-retailers also planned their stock levels well, meaning that less discounting was necessary for January 2010, which probably affected sales in January.

Comparatively, last year's online shopping sales in January were stronger, but analysts believe that this was a direct result of the fact that online stores were offering heavy discounts and a greater number of promotional offers, leading to elevated sales. The recession would also have impacted upon last year's figures, accounting for slower sales last Christmas.

The e-Retail Sales Index, which records sales related to shopping online, is run by the e-retail community IMRG. This is made up of hundreds of retail organisations and helps to enhance and foster opportunities for its members within the e-retail marketplace, promoting safe shopping online, in association with technology consulting group Capgemini.