Fashion flourishes online in June as sales rise, but markdowns are crucial
The news about UK retail in June may have been largely bleak, but it seems that online retail sales “bounced back” last month with the latest IMRG Capgemini eRetail Sales Index that was released on Thursday showing retail sales up 8.5% year-on-year.
Fashion was strong but there were signs that discounts were key and the report came with warnings that retailers need to drive full-price sales soon as the mega-discount season that starts in November isn’t that far away.
June’s results outperformed the three-month, six-month, and 12-month rolling averages (respectively -0.5%, +5.4%, +6.9%) and the sales also managed to rise 5.1% month-on-month.
The report said fashion retailers did well, rising 15.7%, the highest growth seen so far this year, although the value of the average basket fell sharply. Menswear saw its strongest performance of 2019 at +31.2%, and womenswear reversed last month’s negative growth to achieve an increase of 3.3% versus 2018. The accessories and footwear categories were weaker, however, with accessories sales declining 7.4% for their lowest ever June figure and footwear also falling by 8.8%.
Multichannel retailers managed to just beat pureplays with an 8.5% rise compared to the 8.1% increase for online-only stores.
It looks like it was the start of the clearance sales and the arrival of summer weather (despite some quite wet days in June too) that powered the growth after a disappointing May, which had seen online sales suffer their worst growth on record (+1.9%).
The sector also saw positive performances for health & beauty (+20.4%) and home and garden (+9.8), although elsewhere the results continued the negative trend for electricals (-23%), and gifts (-23.4%).
Andy Mulcahy, strategy and insight director at IMRG, said: “The trading environment for online retail in the first half of the year has been tough. June can be interpreted as a bounce-back, particularly given it was building on strong growth of 16.1% in June 2018. However, the discounting has been heavy so the margins achieved may not be high – online clothing sales were up 15.7%, but the average basket value for clothing was down 25%. That doesn’t suggest shopper confidence is very high.
“The key now for retailers is whether they can come out of discounting and maintain a reasonable level of sales growth before we get too close to the Black Friday period. Otherwise we may be in for another difficult peak where the rates of discount are wider and deeper than many retailers would like.”
Copyright © 2022 FashionNetwork.com All rights reserved.