Electricals see ‘surprisingly strong’ sales in January

Online sales of electricals performed well in January following a difficult few months in the second half of 2017.

Sales of electricals grew by 4.4 per cent in January, according to the IMRG Capgemini e-Retail Sales Index. Overall UK online retail sales increased by 13.9 per cent year on year in January.

January recorded the lowest footfall levels in five years, which saw more consumers turning to online shopping, according to IMRG.

The expected post-Christmas month-on-month decline in sales, which came in at 20.4 per cent, was also lower than the five-year average of 24.1 per cent.

The “solid” start to the year was witnessed in spite of a dip in the overall market conversion rate, down from 4.5 per cent last year to 4.3 per cent, which is continuing the downward trend as more consumers browse online before purchasing.

Sales through smartphones were still increasing, but at a slower rate than last year, at 39.3 per cent year on year in January, whereas tablets saw a decrease of 10 per cent.

IMRG managing director Justin Opie said: “Fourteen per cent growth for January represents a strong start to the year, arguably even surprisingly so. The economic climate remains challenging, with inflation remaining at three per cent and an interest rate rise anticipated over the next few months. The impact on retail was very apparent in January, with several very large retailers announcing store closures and job cuts – high street footfall also fell to a five-year low for January.

“Yet online appeared to benefit from that, with the index recording the lowest month-on-month decrease (20.5 per cent) between December and January in five years. It may be that, as we enter 2018, we are seeing signs of an acceleration of the general move over to online, putting pressure on those retailers with large store portfolios to sharpen their focus on rolling out their digital strategy.”

Bhavesh Unadkat, principal consultant in retail customer engagement, Capgemini, commented: “Electricals grew by four per cent on the year – the optimist will position this as a good start to 2018 compared with the declining 2017 performance – it’s proven if electricals does well, then other categories usually follow. The pessimist will argue this performance was delivered through overstocks from peak and heavy discounting in January. I think it is a mixture of the two. Heavy discounting did continue in January for core electricals, but the rise in products available for exercise and voice assistants like Alexa has helped deliver growth to this category. Multichannel retailers had a significantly higher transaction value than online proving how customers across certain categories like the human touch and engagement with products and staff before committing to a purchase.”