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Fall in UK online retail order values in July/August 2011

Recent data shows 20% contraction in month-on-month online sales.


Fall in UK online retail order values in July/August 2011

Recent data shows 20% contraction in month-on-month online sales.

Payment services provider (PSP), Computop, has analysed payment patterns across its global network which show that the recent economic turmoil and uncertainty in the US and the Eurozone has led to a 20% drop in online shopping order values within the UK.  This compares to a 9% rise in the same period, July to August, 2010.

The research also shows an overall decrease in GBP turnover comparing the summer period 2010 to the same period 2011.  In 2010 turnover rose by 8%, however, July to August 2011 analysis shows a drop of 14%.
Comparing July and August 2010 with the same period in 2011, figures show that there is a strong difference in consumer purchasing behaviour.
In the UK, the number of online orders grew by 4%, however, order values dropped by 10%,  resulting in a 7% drop in turnover from June to July.

From July to August, the number of orders increased by 15%, however, basket values dropped by 20%. During the same period 2010, basket values grew by 9% and turnover rose by 8%.

Within the Eurozone, at the end of Q2/2011, there was a 5% increase in turnover as well as in the number of transactions, indicating an indifference of Eurozone consumers regarding the difficult situation within global economies.  However, by August, this indifference has changed and basket values drop by 8.1%.
Ralf Gladis, chief executive of Computop, said, “All indicators point to consumers still buying, but spending far less on each transaction.  Interestingly though, we see an increase in the number of orders placed with UK retailers which could indicate that consumers are switching from the high street to online in order to save money.
“As consumers become more focused on their personal liquidity and concerns of decreasing disposable income, retailers need to build strategies to make them feel more comfortable about their online spending.  For instance, European retailers could increase their payment options to include payment on invoice and online consumer loans for high value products.  These options have less direct impact on consumer liquidity.

He continued, “Another key area for retailers to focus on is ensuring they avoid any consumer hesitation at the checkout stage.  By offering local preferred payment methods such as PayPal in the UK and payment on invoice in Germany and iDEAL in the Netherlands, consumers feel safe and retailers are provided with a payment guarantee, meaning fewer abandoned transactions.”

The Eurozone
Unlike the UK, the Eurozone does not show much difference between summer 2010 and 2011.  Online turnover remained static in 2010 and shows a slow decrease of only 0.8% in summer 2011. In summer 2010, orders increased by 7%, whereas they grew by 12% from July to August 2011.

In the USA last year, online turnover grew by 4% from July to August 2010 due to a 2% increase in orders and a 3% increase of basket values.  During the same period this year, the number of orders remains static whilst turnover grows by 7% and basket values grow by 8%.  This increase in growing US basket values indicate that US online consumers may have already adapted to economic tough times and are starting to spend more online.

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