february 2011 index report

8/2/2019 February 2011 Index Report

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IMRG CAPGEMINI E-RETAIL INDEX- February 2011 www.imrg.org page 1 of 26

February 2011 (reporting January 2011 sales)

STRONG START TO YEARFOR E-RETAILERS

Chart 1: This chart shows UK online shopping sales from May 2000 to January 2011

The year kicked off to a strong start for online retailers with UK shoppers spending an estimated 5.1billion online during January. This compares to an estimated e-retail spend of 4.2 billion in the samemonth last year. The IMRG Capgemini E-retail Sales Index reached 6688, up 21% compared to January2010, and down 25% compared to the previous month. A decline between the months of December andJanuary is typical following a peak in sales over the festive season, however, the monthly fall this yearwas greater than seen in recent years; down 22% in January 2010, 13% in January 2009 and 17% inJanuary 2008.

All sectors, with the exception of health & beauty (Chart 32) recorded positive annual growth duringJanuary. Multichannel / high street retailers continued to perform strongly, with sales up 30% year-on-year, compared to 8% annual growth for online-only / catalogue retailers (Chart 4). Sales of clothing grew23% year-on-year (Chart 19)and within this sector accessories (Chart 26) and lingerie (Chart 29)performed well, up 66% and 23% respectively, compared to January 2010. However, annual growth in

the footwear sector slowed significantly to just 4% (Chart 23), compared to 43% growth in the samemonth last year. Other sectors showing strong yearly growth include electricals, where sales grew 26%year-on-year (Chart 13), gifts, up 23% (Chart 35) and home & garden, where sales surged 56%compared to January 2010 (Chart 41).


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Tina Spooner, Director of Information at IMRG comments: While the Index results for January showa very encouraging start to the year for e-retailers, it is important to note this strong growth is on the backof the lowest-ever annual growth recorded in January last year when the e-retail market grew just 4.6%.Multichannel retailers performed well last month with sales growing by almost a third compared toJanuary last year, but the pureplays and catalogue retailers saw annual growth dip to 8%, following ayear of steady growth in 2010.

Sales of travel were strong during January, particularly after the severe winter weather during December.Clearly, Britons are not tightening their belts where holidays are concerned, with the Index recording thehighest average spend in this sector in over two years.

Chris Webster, head of retail consulting and technology at Capgemini says: January was a veryinteresting month. As expected we saw a strong growth in the Index following a very weak start last year,but the jump in the travel sector and the gap between multichannel and pure plays has come as quite asurprise. In regards to the surge in travel, it seems that the British consumer is looking ahead to sunniertimes and taking full advantage of the big New Year sales offered by the major travel operators. Itremains to be seen whether the sector continues this growth in February following the recentannouncement that Icelands second largest volcano, Bardarbunga, is on the verge of erupting.

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December / January 2010/11 Week on Week Analysis

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Chart 2: This chart shows the weekly growth in online shopping in December 2009/2010 and January 2010/2011

E-retail sales declined each week during January 2011, following a slight rise during the final week of2010. A slight spike in e-retail sales in the first week of January is typical, following the launch of Januarysales and promotions. However, this spike occurred earlier in 2010/2011 as many online retailerspromoted discounts and clearance sales on or shortly after Christmas Day.


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Chart 3: This chart shows the average conversion rate of Index participants from January 2008 to January 2011

The overall average conversion rate declined to 3.5% in January (Chart 3); this is the lowest conversionrate the Index has ever recorded. High street / multichannel retailers recording an average conversionrate of 2.8%, compared to 4.2% for online-only / pureplay retailers.

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Year on Year Growth in IMRG Capgemini E-Retail Sales Index

All SectorMultichannel

Online Only

Chart 4: This chart compares the growth between Multichannel and Online-only retailers fromJanuary 2010 to January 2011


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Chart 4 shows the yearly growth in e-retail sales for multichannel / high street retailers and online-only /catalogue retailers. The Index for online-only / catalogue retailers showed a dip in yearly growth for thefirst time, with sales for this group of retailers up just 8% year-on-year. Multichannel retailers recordedannual growth of 30% in January,

Chart 5: This chart shows the rebased Indexes for multichannel and pureplay e-retailers between January 2009 and

January 2011

Jonathon Brown, head of online selling at John Lewis , said: "In January johnlewis.com continued tosee significant outperformance as our customers responded to our excellent product offer and greatcustomer experience. Overall sales were up over 35% with all buying groups outperforming last year.Most notable was fashion which continued to drive forward with sales +70% on the same month lastyear. The category was boosted by phenomenal sales in womenswear, accessories and beauty. Home,on the back of our Clearance offer, had a very strong month with sales up over 30% on 2010. Overall ithas been a great way to finish the financial year and having passed the 500m landmark (for the year),we have certainly closed out on a high."

Gareth Jones, Retail Director at Shop Direct Group, comments: We have maintained the strongsales performance that we saw over the Christmas period. Sales via mobile devices have beenparticularly pleasing and have continued to show impressive growth, with a 320% year-on-year increasebeing recorded for January.

Russ Carroll, UK managing director of Shopping.com, says: "The e-retail market is going fromstrength to strength as consumers continue to go online for the best price, choice and easiest shoppingexperience when buying a variety of goods. Supporting growth experienced in the travel sector,Shopping.com saw sales of luggage rise by over 20% as many consumers decided they needed to get

away from the miserable British weather! Strong year-on-year growth is proving that even when pursestrings are tight, consumers are recognising the value of shopping online."


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Bruce Fair, Managing Director at Kelkoo, comments: Spending levels witnessed in January will be theexception rather than the norm for 2011, in what can only be described as the last hurrah before thegovernments austerity measures dampen consumer appetite to shop in the coming months. Peoplewere frantically heading online in an attempt to beat the VAT increase and grab a bargain in January.After such a bleak winter, its also no great surprise that the draw of sunnier climes was so appealing lastmonth, resulting in a welcome holiday booking boom for the online travel industry.

Michael Norton, Managing Director of PayPoint.net comments: The online retail industry goes fromstrength to strength in a challenging retail market. Our data showed a 42% increase in the number ofonline transactions in January compared with this time last year and we also saw a significant increase intotal consumer spend. Were seeing a growing number of consumers turn to the convenience and betterprices that only online retailers can offer.

Phillip Rinn, Director of Advertising Partnerships at eBay Advertising , comments:The 31% year-on-year increase in online travel spend highlights just how much consumers are embracing online as apopular channel for holiday and travel-related purchases. Travel is one of the sectors of the UK economythat saw the earliest adoption of the internet as an initial point of purchase and this trend shows no sign

of abating. From a marketing point of view, its therefore important that online has a proportionate shareof the overall spend when brand marketers are allocating budgets.

Sector% ChangeMonth on

MonthJan 2011

% ChangeYear on

YearJan 2011

Average BasketValue

Jan 2011

Average BasketValue Change

YOY

Total Market -25% +21% 136 -10%

High St / Multichannel -24% +30% 195 +2%

Online-only / Catalogue -27% +8% 92 -27%

Beer, Wine, Spirits -67% +6% 101 -33%

Clothing, Footwear,Accessories

-39% +23% 51 -15%

Accessories -53% +66% 40 +29%

Footwear -45% +4% 64 -9%

Electricals -40% +26% 173 +1%

Gifts -76% +23% 44 -27%

Health & Beauty -52% -3% 41 -4%

Lingerie -36% +23% 30 -6%

Travel +173% +31% 886 +2%

Home & Garden +10% +56% 120 +40%

Chart 6: This table shows the Index sector results for January 2011


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Chart 7: This chart shows how e-retail's annual growth rate is changing each year from April to April

Chart 8: This chart shows the overall total market monthly average basket value from January 2008 toJanuary 2011


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Chart 9: This chart shows the sample gross spend per visitor since March 2003

Chart 10: This chart compares the year-on-year growth in the IMRG Capgemini E-retail Sales Index Vs theONS Retail Sales Index from December 2009 to December 2010


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Chart 11: This chart compares the overall growth in the IMRG Capgemini E-retail Sales Index vs the ONSRetail Sales Index between April 2000 and December 2010

ELECTRICALS

Chart 12: This chart shows the growth of the Electrical Sector between May 2002 and January 2011


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Chart 13: The Electrical Index, year-on-year - the values are displayed from April to April

Chart 14: This chart shows the monthly average basket value for the Electrical Sector from January 2008 toJanuary 2011


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BEER / WINE / SPIRITS

Chart 15: This chart shows the growth of the Beers / Wines / Spirits Sector between May 2002 andJanuary 2011

Chart 16: The Beer / Wine / Spirits Index, year-on-year - the values are displayed from April to April


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Chart 17: This chart shows the monthly average basket value for the BWS Sector from January 2008 toJanuary 2011

CLOTHING

Chart 18: This chart shows the growth of the Clothing / Footwear / Accessories Sector between May 2001and January 2011


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Chart 19: The Clothing / Footwear / Accessories Index, year-on-year the values are displayed fromApril to April

Chart 20: This chart shows the monthly average basket value for the Clothing / Footwear / Accessories Sectorfrom January 2008 to January 2011


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Chart 21: This chart shows the average conversion rate for the Clothing / Footwear / Accessories Sectorfrom January 2009 to January 2011

FOOTWEAR

Chart 22: This chart shows the growth of the Footwear Sector between April 2007 and January 2011


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ACCESSORIES

Chart 25: This chart shows the growth of the Accessories Sector between May 2007 and January 2011

Chart 26: The Accessories Index, year-on-year the values are displayed from April to April


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Chart 27: This chart shows the monthly average basket value for the Accessories Sector from January 2008to January 2011

LINGERIE

Chart 28: This chart shows the growth of the Lingerie Sector between April 2007 and January 2011


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Chart 29: The Lingerie Index, year-on-year the values are displayed April to April

Chart 30: This chart shows the monthly average basket value for the Lingerie Sector between January 2008and January 2011


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HEALTH & BEAUTY

Chart 31: This chart shows the growth of the Health & Beauty Sector between October 2006 andJanuary 2011

Chart 32: The Health & Beauty Index, year-on-year the values are displayed from April to April


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Chart 33: This chart shows the monthly average basket value for the Health & Beauty Sector from January 2008 toJanuary 2011

GIFTS

Chart 34: This chart shows the growth of the Gifts Sector between October 2002 and January 2011


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Chart 35: The Gifts Index, year-on-year - the values are displayed from April to April

Chart 36: This chart shows the monthly average basket value for the Gifts Sector from January 2008to January 2011


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TRAVEL

Chart 37: The chart shows the growth of the Travel Sector between December 2008 and January 2011

Chart 38: The Travel Index, year-on-year - the values are displayed from April to April


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Chart 39: This chart shows the average basket value for the Travel sector between December 2008 andJanuary 2011

HOME & GARDEN

Chart 40: This chart shows the growth of the Home & Garden sector between March 2009 andJanuary 2011


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Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr

2010/2011 106 113 98 101 83 82 100 133 112 123

2009/2010 80 80 93 94 84 83 110 151 117 79 67 95 106

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Home & Garden Sector - Year on Year Growth

Chart 41: The Home & Garden Index, year-on-year - the values are displayed from April to April

Chart 42: This chart shows the average basket value for the Home & Garden sector between March 2009 andJanuary 2011


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Home & Garden Sector - Average Conversion Rates

Home & Garden

Chart 43: This chart shows the average conversion rate for the Home & Garden sector between January 2010 and

January 2011


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IMRG Capgemini e-retail Index Sector Classification

The IMRG Capgemini Index records UK online retail sales of the products and services listed in the IndexSector Classification, as set out below.

INDEX SECTOR CLASSIFICATIONThese products and services bought online by UK consumers are

recorded by the IMRG Capgemini Index

EXCLUDED FROM INDEXOnline spending by UK consumers of these items

is excluded from the IMRG Capgemini Index

Beer / wine / spiritsBooksCDs / tapes / recordsClothing / footwear / accessoriesComputer hardware / peripherals / consumablesConsumer electronicsDigital downloads (e.g. music, software)FlowersFood, beverages and household suppliesFurnitureGarden / DIYHealth and beautyHome appliances (e.g. washing machines)Household goods (e.g. kitchenware, bedding)Jewellery / watchesSoftware

Sporting goodsTickets (e.g. cinema, theatre, events)ToysTravel (e.g. flights, holidays, hotels, car hire)Video gamesVideos / DVDs

AdultAuctionsCars / motor vehiclesGamblingGamingHouses / real estateTelecom servicesUtilities (e.g. water, heating, electricity)Financial services, e.g.- CREDIT: mortgages, loans, credit cards,overdrafts- INVESTMENT: savings accounts, funds, stocks& shares, bonds, life assurance, pensions- INSURANCE: car, home, life

About the IMRG Capgemini Index:

The IMRG Capgemini Index tracks 'online sales', which we define as 'transactions completed fully,including payment, via interactive channels' from any location, including in-store. These sales arepredominantly internet-based today, but the Index remains ready to record e-retail sales conducted viawhatever interactive channels the market may embrace in the future.

Around one hundred e-retailers now regularly contribute data to the IMRG Capgemini Index, includingAirport Parking & Hotels Ltd, Amara, Arcadia Group (Burton, Top Man, Top Shop, Dorothy Perkins,Evans, Wallis, Miss Selfridge), Ask Direct, ASOS.com, Beautique.com, BeCheeky.com, Binends.com,Blacks, Boden.co.uk, Boohoo.com, Boots Direct, Brora, Buyagift.com, BuyItDirect.co.uk, CarphoneWarehouse, Charles Tyrwhitt, Clarks, Cloggs, Comet, Co-operative Travel, Crocus.co.uk, Dabs.com,Damart, Debenhams, Dobbies, Ethical Superstore, Figleaves.com, Firebox, First Choice, FreemansGrattan Holdings, Furniture123, Game, Gameplay, Gamestation, Getting Personal.co.uk,GreatValueJewellery.com, Greenfingers.com, Home & Cook, House of Fraser, JD Sports, J D Williams,John Lewis Partnership, Ladderstore.com, Lastminute.com, LK Bennett, Lookfantastic.com, M and MDirect, Made in Sheffield, Marks & Spencer, Matalan, Millets, Musto, My Tuxedo, Naked Wines,NaturalCollection.com, New Look, Next, Peacocks, Perfect Handbags, PetPlanet.co.uk, Philip Kingsley,PIXmania, Prezzybox.com, QVC, R C Roland, Redfoot Revolution, Richer Sounds, Rubber Sole,Sainsburys, Scales Express, Shoe-Shop.com, Shop Direct Home Shopping, Schuh, Serenata Flowers,

Shedstore, Slurp.co.uk, Sofa and Home, Sunshine.co.uk, Tesco.com, Tesco Electrical, The FragranceShop, The Health Supermarket, The Natural Store, TUI UK, Turton Wines, Vie at Home, Waitrose &Wilkinson Hardware.

Participation in the IMRG Capgemini Index is available to reputable e-retailers of all sizes. For furtherdetails, or to participate in the survey, please contact:

Tina Spooner, Director of Information,IMRGTel : +44 (0)20 7189 5533Email: [email protected]
mailto:[email protected]:[email protected]


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*Estimate of Market Cash Value: 1 Index point currently = GBP 0.77 million

Please note that IMRG has rebased its Index-linked estimates of the UK e-retail market size downwardsby 24.9%, and will no longer use Forrester Researchs IMRG Capgemini E-retail Sales Index Multiplier,which we have previously used to estimate the size of the UK e-retail market. IMRGs own extensiveresearch now provides the basis for the IMRG Index Multiplier, which has been rebased to: - 1 Indexpoint = GBP 0.77 million.

The IMRG Capgemini Index is a trend line that represents the collective gross sales value of participatingmerchants. We attribute a cash value to an Index point - i.e. a 'multiplier', with which we estimate the

market's cash value, month by month. To accommodate the fact that the overall internet shoppingmarket's growth is greater than that of the Index group, as more merchants trade online, we haverebased the multiplier value from time to time:- November 2008: 1 point = 0.77 million (IMRG)- May 2006: 1 point = 1.02 million (Forrester Research)- January 2005: 1 point = 0.87 million (Forrester Research)- February 2003: 1 point = 0.82 million (Forrester Research)- April 2000: 1 point = 0.8 million (Forrester Research)

We do not recalculate Index cash value estimates retrospectively, as this would skew the historical data.

About IMRG:IMRG (Interactive Media in Retail Group) is the industry association for global e-retail. Formed in 1990,IMRG is setting and maintaining pragmatic and robust e-retail standards to enable fast-track industrygrowth, and facilitates its community of members with practical help, information, tools, guidance andnetworking. Consumers can be confident when dealing with IMRG Members because all interact in anenvironment where they are encouraged to operate using methods that are Honest, Decent, Legal,Truthful and Fair, and have undertaken to not bring the industry into disrepute. The strength of IMRG isthe collective and cooperative power of its members. For more information please visithttp://www.imrg.org/ or email [email protected].

About Capgemini:

Capgemini is a global leader in consulting, technology, outsourcing, and local professional services,headquartered in Paris, France, and operating in more than 30 countries: www.uk.capgemini.com

ENDS

february 2011 index report

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