UK online retail sales continued their strong showing in 2017, growing 15 per cent year-on-year in February, according to the latest data from the IMRG Capgemini e-Retail Sales Index.

The figures build on the solid growth of 16 per cent seen in February 2016 and mark the second consecutive month that average basket value was at a seven year high for that month of the year.

However, while on the surface this represents a strong month for online retail sales growth, there were some signs that sustaining this rate of growth throughout the whole year may be a challenge.

One of the main drivers for online retail in recent years has been the growth of sales made through smartphone devices. For the past three months, however, the rate of growth through these devices has roughly halved year-on-year — in February 2016 it was 96 per cent year-on-year, but in February 2017 it was just 57 per cent.

Tablet growth remains low (3.5 per cent) and, with smartphones taking a greater share of sales through mobile devices, a sustained slowdown in sales growth through this channel will come to impact upon growth rates for online retail overall.

However, this slowdown in growth through mobile devices (smartphones and tablets) is specific to online-only retailers. For multichannel retailers, which have both an online and in-store offering, growth in sales made on mobile devices was up slightly year-on-year, while the average basket value of online retail sales in general rose by nearly £20.

Bhavesh Unadkat, principal consultant in retail customer engagement design at Capgemini: “It was positive to see a solid growth rate for online retail in February 2017, building on a strong February 2016 growth rate of 16 per cent. However, there was a slight dip in the growth rate this month, and that could be attributed to a knock in consumer confidence triggered by higher prices.”

Justin Opie, managing director at IMRG, added: “It’s encouraging to see the second month of seven-year highs for average basket values in a row. When it comes to smartphones though, the slowdown in sales growth does appear to be fairly dramatic. That said, rates of smartphone growth over the past two years have been very high, and that couldn’t continue indefinitely.

“The slowdown is specific to the online-only retailers — multichannel retailers are performing better than they have been through mobile, with greatly increased average basket values. So it remains positive, but perhaps with a cloud or two on the horizon.”

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