UK online sales exceed £100 billion in 2014


Figures released from the IMRG Capgemini e-Retail Sales Index show that £104bn was spent online in the UK over 2014, the first time annual spending has exceeded the £100bn barrier. The Index grew 14% on 2013. For 2015, IMRG and Capgemini forecast it will record a further 12% growth, with total e-retail sales estimated to be worth £116bn by the end of 2015.

The Christmas shopping period as a whole, defined as the eight weeks between November 2, and December 27, saw UK shoppers spend £21.6bn, equating to 13% growth on the same of 2013.

However, e-retail during December recorded just 5% year-on-year growth – the lowest ever in the Index for this period – as the discounting around Black Friday focused huge volumes of sales activity on the final week of November. According to separate figures from Experian and IMRG, an estimated £810m was spent online on Black Friday 2014, the biggest ever day for UK online sales. The Index figures show that 17% of sales during the Christmas period took place during the week of Black Friday.

Adgild Hop, Principal, Head of Retail Consulting Capgemini commented, “2014 has been an important milestone for the online retail sector, with the £100bn mark being exceeded for the first time. When we consider that almost £1 in every £4 is now spent online, and that a large proportion of the other £3 is influenced by some form of digital interaction, it becomes very clear that retailers need to continue to embrace the opportunity that e-Retail poses.”

“Additionally, we need to be cautious about the tendency of retailers to chase sales volumes at the expense of customer intimacy and profitability. Black Friday was unquestionably a success for the value-seeking consumer, but for retailers themselves, its success is not quite as clear. As the Index reveals, spending was brought forward a month earlier, at much lower margins for retailers, as a result of the discounts available to customers in November.”

Tina Spooner, Chief Information Officer at IMRG said, “While the 5% December online growth is lower than expected, the story of Christmas trading online this year is one of compression. The anticipated heavy discounting that was very widely communicated in advance of Black Friday served to concentrate the peak around that day in November.”

“Looking at Christmas trading as a whole, the 13% growth for November and December combined was actually around where we would have expected. The challenge going forward is that Black Friday has been cemented into shoppers’ consciousness and they will expect the same kind of focused discounting next year. As an industry, we will need to work together to understand how this extreme activity spike can best be managed in the interests of both shoppers and retailers.”

Sales via smartphones and tablet devices recorded a 55% growth on the same period in 2013, with £8bn spent via mobiles over the Christmas period, compared to £5.1bn last year. The Index shows that 37% of online sales are made on a mobile device; an estimated 8.9% of total retail sales.

For more information on the global e-commerce market you can register your interest in Ti’s Global e-commerce Logistics 2015 here.

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