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Online retail growth in freefall in May O


nline retail sales growth fell 8.7% year- on-year in May 2022, despite being


measured against a negative performance in May 2021 (-6%), as trading conditions continue to be very tough. Bucking the trend for positive growth


between the two months, May’s results also represented a 0.6% dip month-on-month against April. That’s according to the latest IMRG Capgemini Online Retail Index, which tracks online sales for 200 retailers. Andy Mulcahy, strategy and insight director


at IMRG, said: “There’s no dressing it up, May’s performance was pretty awful online. April’s results suggested growth might be flat, but it is clear now that the economic situation is having a deep impact on demand; if it wasn’t for the


Jubilee, which produced a slightly better week than the others, the decline might have been double-digit against negative growth for the same month last year.”


Bhavesh Unadkat, head of brand and


content at frog, part of Capgemini Invent, said: “Digging into May’s negative result, a closer look at where consumers are willing to spend money offers some interesting insights. Countering what you might expect as pockets tighten, the sales performance of budget retailers actually plummeted by -15% last month – with luxury retailers also experiencing a fall, although less dramatically at -3.6%. “In fact, it was only the mid-market retailers


who saw any type of growth at +0.5%. With less disposable income to hand, this definitely lends weight to the speculation that consumers are seeking out longer-lasting quality in their goods.”


Social commerce soars as 61% of 25-34-year-olds buy on social media T


he COVID-19 pandemic accelerated consumer adoption of online shopping,


including shopping on social media as more than a third (39%) of all US consumers said they had made a purchase on social media and would do so again. With 90% of consumers aware of brand pages/accounts on social media—and only 10% who say they avoid brands’ social media pages— the opportunity for engagement is huge. Katie Hansen, retail and e-commerce analyst at Mintel, said: “Social commerce is the next


evolution of e-commerce and will benefit from Americans’ heavy use of online shopping in recent years. “As with the adoption of online shopping, it will take time for consumers to become comfortable purchasing items via social media, and even more time for them to do so on any kind of regular basis, but the category will see a boost as a result of increasing engagement from younger consumers as they grow into adulthood and earn more money. “That said, social commerce will in no way


AO World shares plunge after an insurer cuts suppliers’ cover


S


hares in electricals online retailer AO World have fallen by almost 75% over the last year aſter a series of profit


warnings, as supply chain disruption and the reopening of brick and mortar stores hit sales. AO World’s fortunes now seem more


uncertain than previously thought, after the company confirmed that a credit insurer cut cover for the firm’s suppliers after a fall in sales post-Covid-19. However, it stressed that the this was a


reduction from ‘heightened levels’ put in place during the pandemic and that it had ‘no effect’ on the company’s liquidity, ‘which remains in- line’ with the board’s expectations.


6 | www.ierdaily.co.uk


replace traditional e-ommerce or in-store shopping, but it will become a key part of their shopping repertoire.”


It added it still had full access to its £80million revolving credit facility and was continuing to implement ‘a number of ongoing initiatives and further actions’ to strengthen its balance sheet. In June, The Sunday Times reported that


Atradius, one of the largest providers of credit insurance across Europe, had reduced its credit cover for AO World’s suppliers due to a deterioration in the company’s finances. AO World announced the closure of its


German business in June after declining sales, which the company blamed on increased competition, reopening of physical stores after the pandemic and supply chain disruption. The German exit has left AO World to operate solely in the UK, having also already closed its Dutch arm three years ago.


July 2022


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