The landscape of online retail is continually shifting, and August 2024 presented a mix of challenges and opportunities for eCommerce brands.
IMRG’s latest weekly retail data (Webinar #200) highlighted the ongoing complexities faced by retailers in August 2024, with some sectors thriving while others continue to navigate a tough market.
Below is an overview of key trends and insights from the IMRG report, along with actionable takeaways for eCommerce brands looking to maximise performance as we head toward the crucial Q4 trading period.
Overview of August 2024 Performance: A Slow But Steady Recovery
Overall, online sales growth in August 2024 was down by approximately 2% year-on-year (YoY). While negative growth persists, the data does show a recovery trajectory that has been building since January 2024.
The entirety of August was relatively stable, with weekly revenues showing little fluctuation, and the third week performed slightly better than the others.
| Actionable Insight: The consistency in August sales suggests an opportunity for eCommerce brands to focus on steadying their operations, reducing fluctuations, and preparing for the all-important Q4. Planning for a strong Black Friday and Christmas season is crucial, as recent upward trends signal recovery. |
Category Highlights: Health & Beauty Leads the Way
One of the key takeaways from August 2024 is the continued dominance of Health & Beauty as the top-performing category.
Fragrance, in particular, stood out, with a remarkable 65% growth YoY.
Haircare and skincare also posted positive results, highlighting a shift in consumer preferences towards self-care products. Meanwhile, categories like Clothing, Homeware, and Gardening struggled, with revenues down YoY.
| Actionable Insight: For brands operating within or adjacent to the Health & Beauty sector, this is an opportune moment to ramp up inventory, optimise marketing strategies around high-performing subcategories, and consider introducing special promotions, particularly around fragrance and skincare. |
Footwear: The Only Bright Spot in Clothing
The Clothing sector showed lacklustre performance, with negative growth YoY.
However, footwear was a notable outlier, registering around 10% growth, the only subcategory in Clothing to show positive movement.
Menswear continues to struggle, with no positive growth recorded in 2024.
| Actionable Insight: Footwear brands should capitalise on this momentum by strengthening their eCommerce presence and exploring strategic partnerships or collaborations with complementary brands. Menswear brands, on the other hand, may need to re-evaluate their product mix or consider more aggressive discount strategies to stimulate sales. |
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Conversion & Traffic: Encouraging Signs
Despite the challenges in overall sales growth, conversion rates for August 2024 were the strongest seen in the period spanning 2021 to 2024.
Traffic is also improving YoY, surpassing 2023 figures, reflecting a positive trend that brands should take advantage of.
| Actionable Insight: Higher traffic and conversion rates indicate that consumers are actively engaging with online retail. Brands should ensure their websites are optimised for smooth, fast, and enjoyable user experiences. Enhancing the checkout process and minimising cart abandonment will be essential to converting this increased traffic into sales. |
The Impact of Average Basket Value (ABV) & Discount Codes
Guest speakers on the webinar Signifyd (an eCommerce fraud protection platform) brought some really interesting insights from their own data.
Their data showed that the average basket value (ABV) fell in August, a trend speculated to be partly due to inflation.
Interestingly, data revealed that consumers using discount codes had a higher ABV (£142) compared to those who didn’t (£128). The use of discount codes surged towards the end of August, which could be linked to back-to-school shopping.
| Actionable Insight: To counter falling ABV, brands can increase the strategic use of discount codes, particularly around key seasonal events. However, it’s important to ensure that discounts drive up the overall value of transactions and don’t erode profit margins. Personalising these offers based on customer behaviour could also help enhance their effectiveness. |
Sector-Specific Insights
The IMRG’s much-anticipated Category Analysis part of IMRG’s webinar shed light on some great sector-specific revenue performance data, which could guide strategies for brands in different industries:
- Health & Beauty revenue: Positive growth reached +30% in August
- Furniture (Home & Garden) revenue: Positive growth of +13% in August, likely driven by inflation and the increased cost of large-ticket items.
- Electrical revenue: Surged at the end of August, particularly in Audio and Visual & Entertainment, which could be linked to parents, children, and education facilities preparing for the new school year.
- Sports & Outdoors revenue: Peaked at +20% growth mid-August.
Multichannel vs. Online-Only Retailers
Interestingly, sales made by multichannel retailers (those with both physical and online stores) outperformed online-only retailers in August, suggesting that a diversified approach is more resilient in this challenging market.
| Actionable Insight: For brands in these sectors, the upcoming holiday season presents a prime opportunity. Consider introducing early sales or promotions that align with consumer behaviour, such as back-to-school or pre-holiday shopping patterns.Brands should consider enhancing their omnichannel strategies to meet customers wherever they are. Providing seamless transitions between online and offline touch points could give retailers a competitive edge. |
Predicted Q4 Growth: A Mixed Forecast
Looking ahead to Q4, Signifyd predicts moderate sales growth of +1% YoY.
While October is expected to see a slight rise in sales (+2%), November could experience a dip (-1%) before rebounding in December (+4%). This forecast underscores the importance of careful planning for Q4.
| Actionable Insight: Brands should prepare for a competitive holiday season by aligning their strategies with these forecasts. Early preparation for Black Friday and Christmas will be critical to capture consumer interest. Diversifying promotional tactics across Meta ads (Facebook and Instagram) and leveraging high-performing channels like SEO and PPC can help drive traffic and sales. |
Conclusion: Preparing for Peak Season
August 2024’s performance, while mixed, provides valuable insights for eCommerce brands.
The Health & Beauty sector is booming, and there are growth opportunities in Footwear, Furniture, and Electricals.
With Q4 just around the corner, brands must capitalise on the positive trends in traffic and conversion rates.
By optimising the use of discount codes, refining marketing strategies, and preparing early for the holiday rush, brands can set themselves up for success during the most critical period of the year.
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