June online retail growth remains negative, says IMRG Capgemini

After May’s freefall, online retail sales growth dipped just -2.3% Year-on-Year (YoY) in June 2022. That’s according to the latest IMRG Capgemini Online Retail Index, which tracks online sales for 200 retailers.

Whilst this is the highest growth has been to date in 2022, it is being compared against a result of -8.6% in June 2021, which builds a slightly less positive picture.

Equally, though the Month-on-Month (MoM) growth increased by +1.5% against May, suggesting a slight levelling of sales. Typical growth for this time of year is around 2–5% – putting this result at the low end of ‘normal’.

Elsewhere, after rising rapidly since January, the Average Basket Value (ABV) seems to have stabilised for the first time this year – dropping from last month’s peak of £150 back to £145. This is still very high historically, suggesting that consumers continue to prioritise quality over quantity with their purchases. 

At a category level, the trends seen throughout H1 continue to dominate, with all categories reporting negative growth aside from clothing. Looking at the Year-to-Date (YTD – measuring Jan-Jun 2022 YoY growth against Jan-Jun 2021) graph below, we can see the extent to which category growth has been negative in 2022.

The total market is down -16.7% in H1, with categories such as gardening and homeware plummeting over -30%. Meanwhile, clothing continues to recover from the pandemic at +4% YTD and +11.3% YoY, perhaps buoyed by the uptick in in-person events and summer travel.

Category performance YTD

Says Andy Mulcahy, Strategy and Insight Director, IMRG:

“It speaks volumes that a decline of -2.3% feels quite good in the context of 2022. The cost-of-living crisis is having a profound impact on customer behaviour in ways that set it apart from the pandemic. For example, while the pandemic drove massive growth online, it didn’t change things like average spend or conversion.

“If we compare a lockdown period (Q4 2020) with a non-lockdown period (Q4 2021), the differences in some metrics are negligible – the percentage of visitors who view a product page on retail sites fell -3.5%, while the percentage who add something to their basket and proceeded to the checkout fell -4.5%. Comparing Q1 2021 with Q1 2022, as the cost-of-living increases started to bite, those falls are -12% and -22.7% respectively. In some respects, incredibly, it is having a bigger impact.”

Adds Jeremy Wilson, Director of Commerce, Customer Transformation & frog Tech at Capgemini: 

“Though the headline numbers indicate some continued impact of COVID-19 – as the categories that did well during that time fall back and those that didn’t pick up – a deeper dive into the wider trends does show that the cost-of-living crisis is having a very different effect on consumer behaviours.

“The conversion drops and basket value increases we’re seeing now appear to show that the cost-of-living crisis is having a far greater impact on consumers’ spending caution and prioritisation of goods.”