After May’s freefall, online retail sales growth dipped just -2.3% YoY in June 2022, according to the latest IMRG Capgemini Online Retail Index, which tracks online sales for 200 retailers.
While this is the highest growth has been to date in 2022, it is being compared against a result of -8.6% in June 2021, which builds a slightly less positive picture. Equally, though the MoM growth increased by +1.5% against May, suggesting a slight levelling of sales, typical growth for this time of year is around +2–5% – putting this result at the low end of ‘normal’.
Elsewhere, after rising rapidly since January, the Average Basket Value (ABV) seems to have stabilised for the first time this year – dropping from last month’s peak of £150 back to £145. This is still very high historically, suggesting that consumers continue to prioritise quality over quantity with their purchases.
At a category level, the trends seen throughout H1 continue to dominate, with all categories reporting negative growth aside from clothing. The total market was down -16.7% in H1, with categories such as gardening and homeware plummeting over -30%.
Furniture was up +10.4% MoM, but down -5.1% YoY.
Andy Mulcahy, strategy and insight director, IMRG, says: “It speaks volumes that a decline of -2.3% feels quite good in the context of 2022. The cost of living crisis is having a profound impact on customer behaviour in ways that set it apart from the pandemic. For example, while the pandemic drove massive growth online, it didn’t change things like average spend or conversion. If we compare a lockdown period (Q4 2020) with a non-lockdown period (Q4 2021), the differences in some metrics are negligible – the percentage of visitors who view a product page on retail sites fell -3.5%, while the percentage that add something to their basket and proceed to the checkout fell -4.5%. Comparing Q1 2021 with Q1 2022, as the cost of living increases started to bite, those falls are -12% and -22.7% respectively. In some respects, incredibly, it is having a bigger impact.”
Jeremy Wilson, director of commerce, customer transformation and frog tech at Capgemini, adds: “Though the headline numbers indicate some continued impact of Covid-19 – as the categories that did well during that time fall back and those that didn’t pick up – a deeper dive into the wider trends does show that the cost of living crisis is having a very different effect on consumer behaviours.
"Boiled back, the pandemic mainly drove a channel switch – changing where budget was spent, but not necessarily how much and how often. The conversion drops and basket value increases we’re seeing now appear to show that the cost of living crisis is having a far greater impact on consumers’ spending caution and prioritisation of goods. It will be interesting to track these numbers over the coming months, particularly as energy costs soar ever higher.”