According to Capgemini/IMRG Online Retail Index.
Although it was the seventh consecutive month of year-on-year declines in online sales, July matched June’s smaller decline after the first half of the year saw large year-on-year declines.
Simon Binge, Senior Director of Customer Transformation Commerce at Capgemini, said: “As the pressure on their spending continues to mount, consumers are having to make tough choices about their buying behavior, and the data of July suggest that finding value for money is more important than ever. »
The start of 2022 has seen steady declines in online shopping as the market adjusts to the surge in online shopping caused by Covid-19 lockdowns.
In January, there was a 24.4% year-on-year drop in online sales, followed by another 27% year-on-year drop in February and a 25.5% drop in March.
Declines were smaller in subsequent months, with only a 12% year-on-year drop in April and an 8.7% year-on-year drop in May.
June was the first month of the year, the decline was minimal at 2.3%, but although these declines in online sales figures have slowed slowly, Andy Mulcahy, director of strategy and information at IMRG, claimed that the cost-of-living crisis could be traditionally lucrative. time for retail more difficult than usual.
He said: “It seems remarkable that it took the hottest day in British history and England winning a football tournament to produce only slightly negative growth – it makes you wonder what should be done for it to be positive.
“Black Friday/high season trading looks to be very difficult this year, given that the Bank of England has raised interest rates and inflation is expected to reach 13% by then.”
Customer behavior has been heavily influenced by the Covid-19 pandemic, where lockdowns have forced people to operate from home, increasing the number of online purchases made by consumers.
While current government directives have relaxed the rules in the event of a pandemic, the cost of living crisis has now taken center stage, which has a significant impact on the buying behavior of the public.
But inflation isn’t the only reason cited for consumer behavior in July 2022 – Capgemini and IMRG suggest the smaller drop in online sales was due to warm weather and the result of the European Women’s Championship. UEFA warm weather week down 5.8%. growth in online shopping.
Increases in the cost of living were reflected in the average basket value (ABV) in 2022. While the ABV in July fell by £5 per month (MoM) to £140 after falling from £6 MoM to £145 in June, each The previous month saw a steady increase in the average amount spent per online shopping basket, peaking at £151 in May 2022 after starting the year at £115 in January.
Apparel and garden were the two retail categories that saw positive year-on-year online sales growth in July, possibly driven by the UK heatwave, with apparel seeing an increase of 11.9% and gardening items a growth of 3.3%.
Before the pandemic, it was already predicted that online shopping would become the predominant way for consumers to shop, with Capgemini predicting in 2019 that more than half of consumers would shop for food online by 2021.
Many believe the pandemic’s shift to the internet will continue to affect consumer behavior after the pandemic subsides, with O2 Business and Retail Economics finding that 44% of consumers do not plan to return to their pre-pandemic habits.