UK clothing sector still struggling to boost online demand

By

Barbara Santamaria

Published
Apr 24, 2019

Online fashion shoppers remained cautious in March, sending the UK online clothing sector into its fifth consecutive month of single-digit growth.

The latest IMRG Capgemini eRetail Sales Index showed that online clothing sales grew just 3.7% in March compared with the same month last year, as a later Easter pushed back holiday spend.

The first three months of the year have seen subdued growth for online fashion retailers, with revenue growth standing at 2.6% - significantly lower than last year’s 13.9%. Bhavesh Unadkat, principal consultant in retail customer engagement at Capgemini, said the performance was a result of supply outweighing demand, continued discounting and customers being cautious with spending.

Overall, UK online retail sales grew 5% year-on-year in March. Home and garden slowed down to just 1.6% growth, while the footwear sector enjoyed strong growth of 16.7%. Both electricals and gifts saw sales plummet by 26% and 22.1% respectively, according to the index.

In contrast, health and beauty had a strong month, reporting a 15.6% increase in online sales. Beauty in particular outperformed the rest of the sectors with a 19.8% rise, boosted by the launch of celebrity beauty lines.

“The beauty market was the stand-out result this month, reporting 19.8% growth, bringing the sector to 16.8% growth for Q1. However, with home and garden also seeing poor results due to the late Easter break and a continued decline in electricals the overall performance was lacklustre. It will be interesting to see whether the Easter holiday will boost April figures enough to spring some life back into this year’s spending,” commented Bhavesh Unadkat from Capgemini.

Andy Mulcahy, strategy and insight director at IMRG, added: “While on the surface of it 5% growth may not seem very positive, there are actually two possible interpretations. On the one hand it looks bad as it’s below the 3-, 6- and 12-month rolling averages of 7.5%, 7.1% and 10.2% respectively; it’s also the lowest of the first quarter of 2019. On the other hand, this growth is against a strong base from March 2018, which featured Easter (home and garden online sales were down 15% in the equivalent week in March this year) and freezing temperatures that kept people away from high streets and boosted online sales in 2018.”

“As Easter falls in April this year, the growth rate for that month will determine whether March’s performance can be considered good, bad or indifferent given those factors – not to mention the continuing general macro-economic pressures on retail.”