Ecommerce sales took a sharp dip in January as most product categories recorded a slowdown due to weakened demand.
Online revenue fell by 7% in January compared with a decline of 3.5% during the same month last year, according to the latest IMRG Online Retail Index, which tracks the online sales of more than 200 retailers.
The January figure is the second-lowest since the skewed lockdown comparison period in early 2022, with only December 2022 (which was impacted by Royal Mail strikes) showing lower growth.
As ecommerce dwindles after high growth during the pandemic, the channel is expected to have 0% year-on-year growth in 2024.
Online sales saw a decline of 9.4% year on year in January’s payday week, compared with a drop of 11.1% during the same week in 2023.
Andy Mulcahy, strategy and insight director for IMRG, said: “Up until around 2019, ecommerce was rightly regarded as an industry with high potential, buoyed by the notion that everything was going online, and the high street seemed in terminal decline.
“Around that time, though, the overall growth rate for ecommerce had actually started to head toward flat.
“The lockdown period then gave us years of data that was heavily skewed, but what we are seeing now is not just a consequence of that any more.
“The economic situation is dire, demand has been impacted and ecommerce feels like it is no longer immune to tough times but is just as vulnerable as retail more generally and other customer-facing industries.
“However, a possible bright spot on the horizon: while the economic and geopolitical context is fraught and potentially intensifying, ecommerce has traditionally benefited when technology progresses; new devices, such as the tablet and smartphone, helped push up sales by increasing accessibility to retail sites.
“Many of the ‘next big thing’ technologies in recent years – such as voice, augmented reality and the metaverse – have not delivered for retail yet, but AI has come on profoundly in the last 12 months.
“As it becomes widely embedded in platforms and systems, the breadth and quality of personalisation it enables may well be what restores growth to ecommerce. It certainly seems like we can’t rely on stability in the macro-environment to provide it.”