Jun 19, 2018
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UK online retail sees power growth in May - IMRG

Jun 19, 2018

The royal wedding, two bank holidays and scorching temperatures sent UK online sales soaring in May, with growth of 19.4% year-on-year and reaching the highest increase for May since 2010.

This is good news for a retail market that has been battered by CVAs and weak consumer spending in recent months.

According to the latest IMRG Capgemini e-Retail Sales Index, May was the strongest month overall since November 2016. In terms of categories, Footwear and Garden were the real standouts, up 54.5% and 40.2% respectively. Meanwhile, online Health & Beauty sales increased by 23% compared to May 2017.

“Growth for the online retail market has been exceptionally strong so far in 2018, with May’s result being the highest for that month in eight years,” said Andy Mulcahy, strategy and insight director, IMRG. “Things have been tough on the high street recently, though better performance was reported in May – this may have been a blip prompted by the mood of national celebration last month and it’s telling that when physical retail does well, online does even better.”

GfK’s overall Consumer Confidence Index recently showed that consumer confidence is up by 2 points compared to last month, revealing a positive outlook for the year ahead despite the economic uncertainty.

Retailers can make the most of the uplift in consumer spending by producing relevant messaging and offerings, said Bhavesh Unadkat from Capgemeni. But for the long term, evolving traditional stores into multichannel hubs will become crucial.

“Traditional shops won’t vanish entirely – there will always be some level of demand for them – but how high streets and other retail spaces evolve more generally in response to lower shopper interest is a matter for some debate,” said Mulcahy from IMRG.

“Many speak about focusing on in-store ‘experience’ but in many cases the solutions don’t seem to be very different from what was there before. It seems likely that retail is in for a rocky period of readjustment, that might take several years, before blueprints for a successful physical retail space become more apparent.”

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