Consumer spending online has dipped year-on-year for the first time in four years as shoppers fret against a backdrop of slowing wage growth and rising inflation.
The figures, from payments technology firm Visa, indicates that a 0.1% annual fall in e-commerce spending was recorded in April.
This marks the first dip in consumer online spending since September 2013, according to the index.
Overall figures showed consumer spending increased by 0.5 per cent year-on-year in April – the weakest pace of growth recorded in the consumer spending index since the fourth quarter of 2013.
Kevin Jenkins, managing director at Visa in UK and Ireland, said: “Consumer spending slowed down further in April, as consumers tightened their belts in the face of rising prices running up against stalling wage growth. Annual spending growth fell back to 0.5 per cent, from an already subdued rate of 1 per cent in March.”
However, he added that despite the slowdown there were “still some bright spots” and pockets of resilience.
Sending on the high street increased by 0.3 per cent in April supported by a strong Easter with sales of chocolate eggs and hot cross buns helping food and drink spending rise at the fastest rate in three years.
Leisure and hospitality were the best-performing sectors, with spending up by 9.2 per cent year-on-year.
Nir Debbi, co-founder and CMO at Global-e, commented on the news: “With consumer confidence in the UK suffering, according to Visa there is no better time for British retailers to focus their attention on international opportunities. The low value of sterling, coupled with UK’s reputation for producing high-end, quality products and leading retail position, means that quality British products are now more affordable for shoppers from overseas. This creates the ideal set of circumstances for growth in cross-border e-commerce in 2017.
“Political and economic uncertainty is likely to continue throughout this year and beyond. Retailers should devise long term plans to take advantage of rapid growth in cross-border to help reduce risk by selling to a larger, international customer base. With the right preparation, technology and processes in place, as well as a localised shopping experience for the end customer, retailers will see sales grow and conversion rates improve overseas.
Nir Debbi, co-founder and CMO at Global-e offers his top tips to help UK retailers to harness the online opportunity and increase international revenue:
1. Localise the shopping experience
Retailers need to consider how they can improve the online experience for overseas customers. Retailers can do this by offering local payment methods, a wider choice of delivery options and local returns, prices displayed in local currencies and more transparent pricing, with full delivery costs and tax included. In doing so, they are likely to see an increase in international sales and much more favorable conversion rates worldwide.
2. Better understand of your target markets
Local knowhow around customer expectations of online retail is crucial and can increase sales considerably. A specialist partner can provide retailers with the expertise, the best practice strategies and insights on multiple international markets, reducing time to market and supporting effective international growth.
3. Identify international opportunities
There are many different local events worldwide, that became important local shopping peaks. In June, for instance, Valentine’s Day is celebrated in Brazil while Father’s Day is celebrated in the US.
Having the opportunity to take advantage of so many local shopping peaks throughout the year can only mean one thing: higher conversion rates and increased sales globally. Savvy retailers should set up a calendar of cross-border retail events that are significant to the business. Once significant retail events have been identified, promotions should be planned to coincide with these dates.