Online retail sales in May suffer worst growth on record

May continued the 2019 trend of below-average online sales growth, with a marginal 1.9% year-on-year (YoY) increase, according to the latest IMRG Capgemini eRetail Sales Index. When compared to this time last year, which saw the strongest May growth for online retail since 2010, analysts suggest this means the state of online retail “remains tough”. By signing up for our newsletter you agree that we can send you our news briefings and that we may send you promotions on behalf of our partners from time to time. We promise to not use your email for spam and we will not sell it to third parties. By signing up for the Daily Briefing you also agree to our Privacy Policy and our Terms of Service. Further sector analysis during the month showed a number of categories struggling significantly. Electricals (-27.5%) and gifts (-18.5%) continued the downward trend seen since last November and September respectively. Beers, wines and spirits recorded the first negative growth for the year, dropping 19.7%. Clothing has had a much slower growth rate compared with last year’s performance, up 8.2%; menswear was down 13.3% against strong results last year of a 23% increase and womenswear declined 4.8% continuing the trend of single-digit or negative growth this year. Accessories, which has seen successful growth in previous months, has now reported its worst performance in 10 years down 20.0% YoY. Footwear was the only clothing subsector to see positive growth of 6.7%. However, the health and beauty sector continued its strong monthly performance with a 22.6% increase compared to a 2% uptick last year, with the explosion of consumers focusing their attention on health and wellbeing as well as the rise in celebrity beauty endorsements. Despite last month’s drop, m-commerce is up in May by 8.4%, with smartphones reaching 35% and tablets flat at 0.3% against last year. Andy Mulcahy, strategy and insight director, IMRG, said: “When tracking the movement of something in an index, you sometimes get results that are a bit skewed by the growth rate you are comparing against. May 2018 was one such month – with the early summer heatwave, Royal Wedding and a World Cup looming, people seemed happy to spend pretty lavishly on retail, so May 2019 was always going to be anchored by it. “That said, 1.9% growth is far lower than we might have expected; indeed, it’s the lowest since we started tracking nearly 20 years ago, so it seems there is something more going on here.” He added: “The fact is that retailers are caught in a perfect storm at the moment – with all the problems on the high street, changing customer behaviour, shopper confidence low due to all the CVAs and negative coverage of major brands, a shifting competitive landscape, and, of course, even the weather is refusing to provide any relief. It’s proving tough to find any positives in the sales performance at the moment.” Bhavesh Unadkat, principal consultant in retail customer engagement, Capgemini, said: “Over the last few years, health and beauty brands have responded to the increased demand for natural ingredients and attention on environmental impact through exciting developments in product innovation, marketing, and consumer experience. “Therefore, when wallet share is being fought over, adapting to customer needs and what is important to them is key; if other sectors can integrate these principles into their offering to differentiate, diversify, and better engage shoppers, there will be a greater chance of them staying ahead of the game.”

Online retail sales in May suffer worst growth on record

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