Online sales via mobile devices slow as smartphone growth falters

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  • Online retail sales increase of 12.8% year-on-year (YoY) in August
  • Month-on-Month (MoM) decrease of 1.7% from July, notably lower than last year’s drop of 4.8%
  • M-retail growth (mobile retail) was at an all-time low of just 10% YoY
  • Online only retailers outperformed multichannel retailers (14.0% vs. 10.8% YoY)
  • Overall market conversion rate is 4.7%, compared to 4.3% last year
  • Garden growth slows to 2.8%

 
UK online retail sales saw year-on-year growth levels of 12.8% in August according to the latest IMRG Capgemini e-Retail Sales Index. However, m-retail (online sales via smartphones and tablets) growth hit an all-time low of just 10%.

While smartphone growth still came in at 26.7%, it was the lowest growth since September 2014, and a significant drop on last August’s 53.6%. Multichannel m-retail growth only just stayed above water with 1% year on year growth, while online-only m-retail growth was up 15% year on year.
 
Garden finally slowed down after enjoying blockbuster growth from this year’s heatwave, coming in at just 2.8%. Conversely beauty had a strong month coming in at 25.3% YoY. Lastly, clothing had a mixed month, coming in at just 5.4%. Curiously, however, Menswear experienced 18.6% growth versus just 3% for women.
 
Says Bhavesh Unadkat, principal consultant in retail customer engagement, Capgemini: 

“We were expecting a much bigger downturn in August than we got given the effect of the hot summer and events boosting sales in the previous months. The index was down on last month by less than 2%, the lowest decline compared to last four years, and therefore one of best performance we’ve had coming out of July.

“The August performance was largely driven by an uplift in the final week during the August bank holiday weekend; where we started to see a change in the weather, potentially driving autumn-wear and new season growth.”

Adds Andy Mulcahy, strategy and insight director, IMRG:

“The main driver of growth in our index over the past few years has been smartphone devices; throughout 2016 sales growth through these devices was typically in the 75-100% range, then in 2017 it gradually slowed down to be in the 40-60% range, then as we’ve entered 2018 it has continued to decline. This is expected, as very high growth cannot usually be sustained for long periods, but in August three points of note happened.

“The first was that smartphone sales growth was at its lowest rate since September 2014; August 2018 was also the first time it has fallen below the 30% mark since then. The second was that, looking at mobile devices overall (smartphone and tablets combined), growth was at its lowest ever rate since we started tracking it in 2012. And finally, the weak performance seems to be attributed to the multichannel retailers, who recorded overall mobile device growth of just 1%, while for the online-only retailers it was up 15%.”
 
The IMRG Capgemini Index, which was started in April 2000, tracks ‘online sales’, which it defines as ‘transactions completed fully, including payment, via interactive channels’ from any location, including in-store. 

Chris Price