July puts brakes on record online sales declines

After two months of record sales declines in May and June, online retail sales rallied slightly for July but were still down almost 10% from the same month last year.

According to the latest IMRG Capgemini Online Retail Index, after retail sales online in June fell by 14.1% year on year, things sales picked up in July, with sales dropping by just 9.6%.

IMRG Capgemini said that this, combined with a better-than-average month-on-month dip of just 4.4%, could signal a return to stability in the near future.

Multichannel retailers saw their sales dip by 12%, while online-only players saw their sales dip for the first time since the pandemic began, falling by 4.6%.

May and June saw the steepest falls in online retail sales in the history of the index, which tracks the performance of more than 200 online retailers. IMRG Capgemini pointed to a continuing slowdown in the online sales rot with weekly figures indicating that while sales fell by 14% in the first week of July, they were only 5% down in the final week of that month.

Looking at two of the most closely KBB-related categories covered by the index, electricals showed a year-on-year decline of 12.2% in July (-11.3% month on month), while furniture experienced a 27% year-on-year drop (-0.6% month on month)

On a more positive note, the index noted that average basket value for July was the highest of the year so far at £134.

Commenting on the figures, Andy Mulcahy, strategy and insight director at IMRG said: “In July 2021, month-on-month (MoM) growth was ahead of where it usually is at this point of the year, with the amount spent online declining by 4.4% against June, whereas -8% was typical in 2020 and 2019. For the previous three months, the MoM rate has tracked below where it would normally be as shopper spend has been redistributed across other areas following the phased easing of restrictions.”

He added: “Perhaps the ‘pingdemic’ has played a role here, as so many people were forced into isolation, but it’s also tempting to suggest that we might be starting to see what the much-feted ‘new normal’ will actually look like from a retail perspective. If that MoM measure is starting to plot the established trading patterns that naturally go up and down at various times of year, the question of how much volume will stick online following the pandemic will have been answered.”

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