UK e-commerce sales were up +15% year-on-year (YoY) in February, according to the latest figures from the IMRG Capgemini e-Retail Sales Index, building on solid growth in February 2016 (+16%).
For the second month running, the average basket value was at a seven-year high for that month of the year.
While on the surface this represents a strong month for e-commerce sales growth, there were some signs that sustaining this rate of growth throughout the whole year may be a challenge. One of the main drivers for online retail in recent years has been the growth of sales made through smartphone devices.
For the past three months, however, the rate of growth through these devices has roughly halved year-on-year — in February 2016 it was +96% YoY, but in February 2017 it was just +57%.
Tablet growth remains low (+3.5%) and, with smartphones taking a greater share of sales through mobile devices, a sustained slowdown in sales growth through this channel will come to impact upon growth rates for online retail overall.
However, this slowdown in growth through mobile devices (smartphones and tablets) is specific to online-only retailers. For multichannel retailers, which have both an online and in-store offering, growth in sales made on mobile devices was up slightly year-on-year, while the average basket value of online retail sales in general rose by nearly £20.
Across sectors, sales for electricals were up +1.5%. While low, it is at least in positive territory following two months of negative growth. The average basket value was down £8 year-on-year, however.
“It’s encouraging to see the second month of seven-year highs for average basket values in a row. When it comes to smartphones though, the slowdown in sales growth does appear to be fairly dramatic,” explains Justin Opie, managing director, IMRG.
“That said, rates of smartphone growth over the past two years have been very high, and that couldn’t continue indefinitely. The slowdown is specific to the online-only retailers — multichannel retailers are performing better than they have been through mobile, with greatly increased average basket values.
So it remains positive, but perhaps with a cloud or two on the horizon. Smartphones have been the driver of mobile growth, and the slowdown could come to impact growth. And, of course, the ever-present uncertainty of Brexit looms large in 2017, with inflation rising and Article 50 being triggered imminently.”