The rapid pace of online retail growth looks set to slow to a single digit figure for the first time since records began.
Data from the IMRG Capgemini e-Retail Sales Index has recently illustrated that throughout 2017 only March and April posted notably stronger year-on-year upticks in trading. Indeed, the slowdown has now led experts to predict a rate of growth for 2018 of just 9%.
An average annual sales figure growth of 12.1% fell two percentage points below e-Tail forecasts for 2017 from IMRG and nearly 4% behind the growth trend seen in 2016.
Interestingly, despite new records being set over the Christmas period for mobile generated sales, the July to December growth rate fell from 77% in 2016 to 50% in 2017, indicating a general slowdown outside of retail holiday events. Trade stemming from tablets has flatlined, achieving just a 0.7% growth in 2017. 2018 forecasts are now expected to slow across all devices.
Justin Opie, managing director, IMRG, explained: “A decline in the rate of online sales growth in 2017 was forecast, though it turned out to be sharper than expected. The macro economic factors – rising inflation, low wage growth, rise in the interest rate etc – are likely to have been influential and the first half of 2018 may be challenging too; discounting in the lead-up to Black Friday started deep into October in 2017 and have been widely available ever since.
“It may be that retailers will now find themselves caught in a cycle of discounting, which also happened in 2011 and 2015 and will probably extend long after the January sales, as the trading climate is tough at the moment. That said, 2018 does look set to be a transformational year for retail – with an increasing use of AI services anticipated plus the rise of ‘browserless commerce’ (through devices such as voice assistants). It may be that we see shopper behaviour shift significantly over the coming period.”
Might 2019 see a bounceback? Historical data points to a “three-year-bounce” with spikes in 2010 attributed to improved website load speeds, 2013 attributed to tablet growth and 2016 as a result of shopping growth via smartphone.
“Should 2018 follow this pattern we can anticipate a new stimulus to be entering or proliferating the market during 2019,” said IMRG.
Curious how others in bike retail are feeling about online trading? Catch our discussion with four very different store owners here.