19 May 2024, 02:14
By Furniture News Feb 07, 2023

January sees decline in online sales

Difficult trading conditions continued into the new year for ecommerce, where total market online retail revenue growth experienced a -2.2% YoY decline, presenting negative-on-negative growth against the huge, lockdown-affected rate of -22.5% in January 2022 – according to the latest IMRG Online Retail Index, which tracks online sales for 200 retailers.

January also saw a sharper-than-usual MoM decline, where revenue dropped by -28.7% against December (between 2019-21, it was in the range of -17% to -21%).

Growth in traffic to online retail sites was often positive during 2022, albeit marginally, but that too has declined for a few months running now, down -5.2% YoY in January against -7.7% in January 2022 for the overall market – although some categories are faring better than others.

Inflation is also evident in the figures, with the total market average basket value increasing from £113 in January 2022 to £130 in January this year. Meanwhile, retailers are struggling to get their customers to convert at the same rate as before the cost-of-living crisis started to bite – while the average conversion rate for total sessions remained roughly flat against January 2022 (around 3.2%), it is substantially down against two years ago in January 2021 when it was 4.1%. 

Looking at online retail product categories, gifts sales continue to be tough, with a -16.1% YoY decline in January 2023 against -14.2% in 2022.

A stand-out performer was the subcategory of gardening, which saw a significant online growth increase of +43.8% from -50.5% in January 2022.

Andy Mulcahy, strategy and insight director, IMRG, says: “These disappointing, though not entirely unexpected, revenue and conversion rate results are in line with IMRG’s 2023 forecast for online retail, which expects YoY declines in total market revenue growth (-3%), home & garden and electricals categories (both -5%), health & beauty (-4%), gifts (-7%), and no growth is predicted for clothing.

"Shopper confidence is the key, however – if there are any notable improvements in the economic situation we should see that conversion rate nudge up again as people feel a bit more secure in their financial situation, so can spend out on more discretionary purchases. From January’s results however, it feels little way off yet.”

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