IMRG: Lowest growth in seven years for online retail in November

UK online retail suffered its worst November growth since 2011 coming in at just +8.1% year-on-year, as Black Friday discounting failed to rejuvenate consumer spending across the month and relieve the recent struggles for UK retailers, according to the latest IMRG Capgemini e-Retail Sales Index.

  • November fell below the three- (+8.3%), six- (+10.5%) and 12-month (+12.2%) sales growth averages, as the market experienced its lowest ever growth for a Black Friday week.
  • While online retail appeared resilient to the struggles experienced on the high street during the first half of 2018 (when growth was up 16% vs the first half of 2017), it is now being impacted by the tough trading climate.
  • The Health and Beauty sector was the main beneficiary of Black Friday, achieving an impressive +25.1% growth (YoY) and an increase of +95.5% from October MoM. However, in contrast, gifts were down by -10.3% compared to last year.
  • Online only retailers outperformed multichannel retailers (+11.6% vs.+6.3%)

There is economic and political stability potentially impacting shopper confidence, plus the possibility that people might be becoming fatigued with the event [Black Friday]– a factor compounded by negative stories released in the run-up, such as those by Which?.

 

One thing that is clear from our research is that heavy discounting had been going on far in advance of Black Friday, which lessens retailers’ capacity for grabbing attention by going into sale. Did the sheer scale of the discount rates suppress revenue? Or is the overall peak spend getting more evenly spread throughout the Christmas build-up this year, due to Black Friday falling so early in November before many people had been paid? It’s a very complicated story this year, but the duration and depth of discounting rates are likely to be very significant.

Andy Mulcahy, strategy and insight director, IMRG