Online retail sales growth slows despite Black Friday

UK etail sales rose 11.5% year on year last month, substantially below the growth average for the past four years of 18.3%, according to the IMRG Capgemini e-Retail Sales Index.

Although Black Friday sales edged ahead of overall sales growth during the month, up 11.7% year on year, the sales bonanza proved insufficient to buoy the overall monthly increase.

November’s online sales growth was also below the three-month average of 12.7%.

The electricals sector experienced a 0.9% drop in online sales during the month overall, despite sales during the week of Black Friday jumping 22%.

The retailers that won the highest proportion of sales growth during Black Friday were those that generated between £10m to £100m in online sales per year, while larger retailers’ results from the retail event were more mixed.

Retailers’ discounting periods also widened to incorporate a greater proportion of the month in comparison with previous years, indicating that retailers have become more reliant on a wider window of sales to spur more purchases.

Capgemini’s principal consultant in retail customer engagement Bhavesh Unadkat said: “Year-on-year performance is down across key categories, reflecting the continuation of a tough year for online retail.

“While the Black Friday window offered a small spike in performance, it was nowhere near as impactful as the industry would have hoped.”

IMRG managing director Justin Opie added: “Black Friday is all about discounting in the mind of the shopper and it’s perhaps unsurprising that, while ordering activity is high over that period, revenue growth is struggling to keep pace over November as a whole due to the long lead-in to the Black Friday period.

“It does raise a question regarding how retailers can actually assess success over that period.

“On the one hand, securing share of sales away from their competitors is obviously always important to retailers.

“But it might be that the measurement of success over the Black Friday period is less about order volumes and more about the longer-term view – how new customers acquired can be converted into regular, loyal, higher-margin customers through the quality of the follow-up marketing after the discounting peak is over.”