Christmas comes early for online retailers

Sales of gifts online expected to be 16 per cent higher than last year, according to the IMRG Capgemini e-Retail Sales Index

£6.4 billion is expected to be spent online in the UK this Christmas

Online retailers should begin gearing up for the Christmas period as the festive sales peak is set to come earlier than ever, according to a recent study.

Online Christmas sales are expected to be 16 per cent higher than last year with expected online sales of £6.4bn, according to the IMRG Capgemini e-Retail Sales Index.

British shoppers have already spent a total of £4.8bn online during September, marking a year-on-year growth of 24 per cent, bucking the recent fall in sales on the high street.

According to IMRG, the major product areas set to top consumers’ wishlists are beers, wines and spirits, electrical goods, and health and beauty products.

“What we’ve seen is that sales of gifts have increased slightly earlier this year, soaring 32 per cent in September year on year,” said Tina Spooner, director of information at IMRG.

“That is earlier than normal – usually we see a spike in October and I think perhaps consumers are trying to spread the cost of Christmas over a longer period; perhaps over another pay cheque.”

She added that multi-channel retailers are best placed to capitalise on the demand, as their sales growth has outperformed that of 'pureplay' retailers that have an online presence only, and catalogue retailers that also have an online presence.

“Multi-channel retailers – those with a presence on the high street and online - have historically been outperforming the rest of the market,” said Spooner.

In the first fiscal quarter of 2010, multi-channel retailers increased their sales by 22 per cent year on year, 27 per cent in the second quarter and 26 per cent in the third quarter, compared with the same period last year. This marks an overall 25 per cent increase year on year.

In comparison, online pureplay and online catalogue retailers’ growth has been relatively modest, with revenue from the first quarter of 2010 seeing a one per cent reduction year on year, an eight per cent increase in the second quarter year on year, and a 14 per cent increase in the third quarter.

“It’s very clear from these figures that multi-channel retailers are outperforming the rest of the market.”

Spooner also sees an opportunity for savvy retailers to capitalise on Christmas demand by launching their own mobile commerce sites.

“Recent months have seen a number of multi-channel retailers launching their own mobile websites – John Lewis and Marks & Spencer are two. This shows that clearly there’s a demand in the mobile space.”