Online sales grew at slowest-ever rate in December

Ecommerce sales grew just 3.6% year on year in December 2018, according to the latest Capgemini IMRG eRetail Sales Index. It marked the lowest rate of growth ever recorded in the 18 years that the index has been produced. 

Online spending in December fell 15% compared to November, an even bigger decrease than the 11% suffered during the same period in 2017.

The downturn was predominantly driven by a record low sales performance in electricals, which as a category slumped 21.7% year on year.

Despite the December figures, and a poor second half of the year, online retail sales across the whole of 2018 grew 11.8%, the index said.

IMRG said much of this growth was driven by a very strong first half of the year, due to “the impact of feel-good events like the Royal Wedding and the World Cup”, combined with the summer heatwave.

The index reported a 22% year-on-year increase in online menswear sales and 19% year-on-year growth in home and beauty sales. 

Online sales made via smartphone jumped 28% in 2018, compared with 49% growth in 2017 and 79% in 2016. By comparison, sales made via tablets dropped 8% in 2018, compared with 1% and 8% increases in 2017 and 2016 respectively.

Further slowdown predicted

IMRG and Capgemini have forecast that online retail growth will fall to 9% year on year in 2019, due to “continuing uncertainty”.

Andy Mulcahy, strategy and insight director at IMRG, said: “The first half of 2018 was actually very strong for online retailers – it resisted and arguably benefited from the tough climate that impacted trade for store retail.

”It is only the second half of the year where the suppressed confidence and spend, evident in so many other sectors, has spread to online retail; the macro-economic situation must be exerting pressure here, particularly with Brexit now entering its crunch period in Q1 2019.

“If there had not been so much uncertainty and shopper confidence had not been so negatively impacted toward the end of the year, it seems a reasonable bet that online retail sales growth could have been much stronger than 11.8% for 2018.”