Amid rising inflation, online retail sales fell -12% year-on-year in April, according to the latest IMRG Capgemini Online Retail Index, which tracks the online sales performance of more than 200 retailers. .
With last month’s results representing the first time in two years that the index was not skewed by pandemic lockdown comparisons, expectations of a return to pre-Covid patterns were high. However, the results showed there was no real growth in online sales – last month’s performance simply mirroring April 2021 growth of +12%. This reflection was also evident in the weekly results, with growth in the fourth week of April 2022, for example, at -10%, compared to +10% for the same week the previous year.
Looking closer, there are signs that the current economic situation is having an influence on the average basket value (ABV), which hit an all-time high of £146 in April, £3 above the previous record high. pandemic established in August 2021. .
With rising supply chain costs rippling into product prices and the rising cost of living showing no signs of abating, shoppers are taking longer to make purchase decisions and retailers are having to rely more on discounts to drive business, especially for smaller products. However, the ABV also indicates that many consumers are still willing to buy more expensive items or buy in bulk in order to get better value.
Andy Mulcahy, Director of Strategy and Insight, IMRGsays: “Throughout the pandemic, there has been a lot of speculation about what the ‘new normal’ might be like once everything has calmed down.
“After two years of huge increases in online volume, it looks like the growth is now over. This is not just a reflection of the end of the pandemic in the minds of many people – the new phase of rising costs and bills is creating highly unpredictable conditions with many retailers reporting a slow response to activity and erratic spending, and it looks like this is just the start of a tough year for UK shoppers.
Lucy Gibbs, Senior Director, Retail Head of Analytics and AI, Capgemini, adds: “Demand for certain categories has become less predictable during the pandemic due to external factors and changes in behaviors and lifestyles. As we begin to move forward, we see signs of a return to the norm – however, it is clear that shifting priorities around new cost pressures and economic factors will also influence future demand patterns.
“If we project pre-pandemic trends, we can infer which categories are still outperforming – home and garden and health and beauty are still well ahead of what we expect from them despite tracking growth negative annual for this month Apparel is around in line with our expectations, recovering after losing in the pandemic.
“As uncertainty continues to reign, it reinforces that retailers and brands will need to remain nimble and resilient – responsive to customer needs, where attention will likely now focus on price, necessity and value, to create an extraordinary experience and drive other loyalty factors.