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Capgemini study shows challenging start to year for online retail

Mar 20
Tags: Capgemini
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Capgemini study shows challenging start to year for online...

Online retailers in the UK were facing major challenges at the start of this year, even before the coronavirus outbreak really started to take its toll on British life and business, according to new research.

The Capgemini/IMRG Online Retail Index for February 2020 showed that online sales growth slipped into negative territory during the month, registering at -0.4%.

This figure - which followed equally weak performance in January - was well below the three, six and 12-month rolling averages of +4%, +7.5% and +5.3%, respectively.

Analysing the results, Capgemini pointed out that the string of winter storms that hit the UK at the start of the year clearly failed to stimulate online demand. 

The company said the picture was "particularly bleak" for multichannel retailers, which registered negative sales growth of -8.2%. Online-only firms, by comparison, saw their sales increase by 12.5% in February.

It's possible that the divergence emerging between these two sectors could be exacerbated by the coronavirus outbreak and its wide-reaching repercussions.

Andy Mulcahy, strategy and insight director at IMRG, pointed out that the retail industry has been "beset with problems" in recent years, even before the current health crisis.

"We were already seeing a division opening up between the fortunes of multichannel and online-only retailers, and this might be a trend that becomes increasingly profound given the current climate," he added.

Lucy Gibbs, managing consultant for retail insight at Capgemini, pointed out that the coronavirus situation could have some positive consequences for the industry, including an increase in online sales in categories such as home and garden.

"The months ahead could prove an opportunity for online to help serve customer needs … potentially [as] part of a larger shift to digital," she said.

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