August generally sees a slowdown in online retail activity, as Britons enjoy their last month of the summer holidays. Online retail traffic rose by 4.5% in August YoY, which was a slight uptake from July’s performance of 4.1%. But both months have risen slower than this time last year (5.2% in August 2017 and 6.2% in July 2017).
This decelerated growth has predominantly come from Department Stores, which accounts for over 40% of all online retail activity. Visits rose by 4.4% in August 2018, compared to 5.3% in August 2017. Multi-category retailers typically expect an uplift from Back to School preparations over the month. But looking at searches around school clothing and supplies, demand going to Department Stores dropped by 9% YoY.
A key factor to this drop was the closure of Tesco Direct’s site in July, which was a dominant player for Back To School in 2017. Whilst some of this traffic transferred to Tesco’s general site and other multi-category retailers like Amazon, Argos and Marks & Spencer, the vertical still saw an overall decline in August.
Instead, category specialists took advantage of this gap. This included: Apparel brands like Tu Clothing and Matalan, stationery specialists like Smiggle and Paperchase, and sports brands such as Adidas, Nike and Vans – all of which saw increased search demand from Back to School-related searches.
Additionally, Consumer Electronics started to regain some ground, after struggling in the first half of the year. Online activity grew by 5.5% in August 2018, compared to the smaller rise of 2.8% in August 2017. New phone models, such as the Samsung S9 and Huawei P20, and laptops, like Acer Swift and Tab S4, drove this monthly increase.
August results may bring about a slight cause of concern, particularly among Department Stores. But, uptakes in smaller category specialists like Consumer Electronics show that there is still room to grow. Retailers and brands need to stay on top of changing consumer demands and interests to reap the benefits.
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