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Published
Sep 8, 2021
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UK online retail sales slow, fashion shines but beauty struggles

Published
Sep 8, 2021

Online retail sales for the UK were subdued in August with another fall year-on-year, this time by 9.3%, only slightly better than the 9.6% drop seen in July.


M&S


Not that these falls were unexpected as the UK’s return to almost-normality has been encouraging consumers back into physical shops.

But it's interesting that the renewed enthusiasm for shopping physically has affected the online performance of various categories quite differently.

The latest IMRG Capgemini Online Retail Index, which tracks the online sales performance of over 200 retailers, showed that health & beauty remains the poorest performer – down 32.8% versus the prior month’s -36.1%.

By contrast, clothing managed to remain positive at +10.3%, suggesting that the online shopping habit for fashion shoppers is now deeply ingrained. 

Other notable spending trends in August included the Average Basket Volume (ABV) reaching its highest level for 2021 at £149.

But this was mainly driven by sales in home & garden and electricals, perhaps due to customers switching their cancelled holiday spend for big-ticket items. Worryingly however, conversion sank to its lowest rate this year  at 3.14%.

Lucy Gibbs, managing consultant, Retail Lead for Analytics & AI and Capgemini, said that as well as embracing store shopping, “other factors could be affecting online shopping volumes and driving down conversion rates”. These include “the recent supply chain challenges worldwide resulting in stock shortage and delayed delivery timelines, resulting in out-of-stocks on E-commerce websites and worse customer delivery times.”

Andy Mulcahy, strategy and insight director at IMRG, echoed this and said that Black Friday promotions could be affected: “There is some evidence that supply issues are exerting an influence over online trading. With conversion dropping, it suggests people are encountering out-of-stock items or not finding what they were looking for, but when they do find something in stock, they buy it without shopping around for a better price.

“A lower reliance on discounting to drive sales is interesting in the build-up to Black Friday – the discounting event of the year. It does seem highly likely that whatever a retailer’s plan for Black Friday stock was back in January, there will need to be some adaptation if they can’t get the right products in time to fit their campaign plans. It could be a year where stock runs down quickly, so retailers will need to be conscious that they don’t overpromise and end up frustrating customers.”

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