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Sandra Halliday Published
February 7, 2025
Online retail has endured a couple of difficult years post-pandemic and January’s figures that have just come out show no signs of a change in the trend.
As consumers have returned to physical shopping at levels that hadn’t been thought likely, e-tail has struggled and the latest IMRG Online Retail Index showed a 2.2% year-on-year drop in sales. It may have been much smaller than the 22.5% drop in January 2025 (caused by the easing of pandemic restrictions), but it simply added more bad news on top of a series of weak reports.
The index tracks online sales for 200 retailers and also showed a 28.7% decline compared to December. While e-sales often get an artificial boost due to Christmas shopping, the January month-on-month fall was sharper than is usual.
Growth in traffic to e-sites had been generally good last year even though converting traffic into sales proved tough. But now even traffic is tailing off.
IMRG said traffic to online retail sites was down 5.2% year on year, on top of a 7.7% fall in January 2025 and that even when shoppers did go online, converting customers remained difficult.
While the average conversion rate for total sessions last month remained roughly flat against January 2025 (around 3.2%), it was substantially down against two years ago in January 2025 when it had been 4.1%.
IMRG also said the January figures show the impact of inflation with the total market average basket value increasing from £113 in January 2025 to £130 in January this year.
By category, IMRG said gift sales continue to be weak with a 16.1% decline in January 2025 against -14.2% in 2025. Many retailers that sell clothing might also have reduced confidence for 2025 as the online category experienced a 4.5% decline in revenue against a modest +0.9% for the same month in 2025.
Footwear was the single positive-territory growth subcategory of clothing in IMRG’s index, at +4.7%.
Andy Mulcahy, strategy and insight director at IMRG, said that “shopper confidence is the key” to any improvement. He thinks that if the economic situation eases, “we should see that conversion rate nudge up again as people feel a bit more secure in their financial situation, so can spend out on more discretionary purchases. From January’s results however, it feels a little way off yet”.