Strong Christmas trading carries over into 2003, as e-tailers take six per cent of UK market
Internet shopping clicked up its second &£1bn month in January, according to the IMRG e-Retail Sales Index, while mainstream retailing slumped 44 per cent, from &£29.2bn in December to just &£16.5bn in January, according to the Office for National Statistics.
Online shopping grew 19 times faster than bricks-and-mortar retailing in December, and grew a further five per cent in January. It now represents six per cent of all UK retail, according to the IMRG Index.
IMRG managing director Jo Tucker says: “Canny shoppers found bargains galore online, and waited for the January sales to make many purchases, thereby putting intense pressure on retail margins.”
The new IMRG Index data provides evidence that the growth rate of online shopping is continuing to accelerate: January’s e-tail sales, worth &£999.85m, were up well over five per cent on December, whereas in January 2002, they fell 17.3 per cent month on month; the annual increase in the value of internet shopping almost doubled, from just over 70 per cent last year (January 2001 to January 2002) to almost 130 per cent this year (January 2002 to January 2003).
The following are comments from e-tailers participating in the IMRG survey:
dvd.co.uk director Paul McDonnell: “Our January sale resulted in an 800 per cent increase in sales of two proven successful internet propositions: collectable DVD box sets and deep discounting. We noticed that sales increased dramatically within minutes of posting the promotions – once again demonstrating the internet is an extremely effective tool for consumers comparing prices.”
Shoe-shop.com managing director Stuart Paver: “The last week in January was our busiest week ever by turnover and product shipped – over 2,000 pairs for the first time. January is traditionally a slow time for retailers, so it looks like 2003 will be a vintage year for e-tailing.”
Shoesdirect.co.uk managing director Tim Lodge: “We have traded well throughout January, although it has been at a reduced margin, owing to the need to offer customers comparable value to the reductions being offered on the high streets at sale time. We have high street shops and understand how important the January sales are to our own business, which has helped us to mirror this trading opportunity online.”
Furniture123.co.uk managing director Julian Field says: “January was a record month for us, with orders up over 250 per cent on last year. There was a noticeable increase in the number of people applying for interest-free credit.”
Virgin Wines chief executive Rowan Gormley: “This year has started strongly for us, which just goes to show that New Year’s resolutions aren’t what they used to be. We’re showing significant sales increases compared with the same month last year.”
Alex Murray, store manager of online wine merchant Berry Bros & Rudd says: “Sales were encouraging in January compared with 2002. Traditional regions and mixed selections performed particularly well.”
Amarjit Singh, director of electronics retailer Empiredirect.co.uk: “January was another excellent month for sales, with year-on-year growth of over 100 per cent. The first seven days of 2003 proved to be our best week to date, beating one in December.”
Malcolm Wilkinson, managing director of Speeding.co.uk, an online car accessory store: “E-commerce sales continue to exceed sales from the retail side of our business. The high street was a lonely place in January: winter sale posters in the window had very little effect; snow, frost and cold winds reduced the footfall. Even though the internet ran slow for a couple of days in mid-January, Web customers were sufficiently motivated to come back and place orders once it was back up to speed.”
Daniel Nabarro, chairman of lingerie e-tailer Figleaves.com: “Following a bumper Christmas, we entered the sale period with lower levels of clearance stock than expected. However, early purchases of new Valentine’s stock and early spring deliveries ensured that we fulfilled our sales plan. Additionally, Christmas returns were five per cent lower than last year. Results from the US site, launched in December, were most encouraging with conversion rates around half the UK figure but showing a steady upward trend.”
Seth Dashper, marketing manager at Iwantoneof-those.com, a gift and gadget e-tailer, adds: “Driven by a catalogue mailing early in the month, the site has maintained strong sales throughout the opening period of the year, up 100 per cent on January 2002. Encouragingly, many of the sales are from customers recruited during the Christmas period, confirming their propensity to buy for themselves throughout the year rather than merely gift-buying in the run-up to Christmas. Promoting year-round purchasing activity is essential for retailers focused on non-commodity products.”
Eighty-one e-tailers contributed data to the IMRG January Index, including TheAA.com, Argos, Carphone Warehouse, Debenhams, John Lewis, Laura Ashley, Littlewoods, Tesco.com Wine, ThinkNatural.co.uk, The Sunday Times Wine Club, Thorntons and Waitrose.