{"id":2506,"date":"2017-11-20T15:03:13","date_gmt":"2017-11-20T15:03:13","guid":{"rendered":"https:\/\/brightpearl20.wpengine.com\/retail-insights-which-industry-came-out-on-top-in-october-2017\/"},"modified":"2021-02-08T09:51:44","modified_gmt":"2021-02-08T09:51:44","slug":"retail-insights-october-2017","status":"publish","type":"post","link":"https:\/\/www.brightpearl.com\/blog\/retail-insights-october-2017","title":{"rendered":"Retail Insights: Which Industry Came Out on Top in October 2017?"},"content":{"rendered":"<p><span style=\"background-color: transparent; letter-spacing: 0px;\">In this article, we&#8217;ll be diving into October&#8217;s retail data to identify the key themes that emerged last month. Here are the top level highlights:<\/span><\/p>\n<p><!--more--><\/p>\n<ul>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Both the UK and the US online retail markets perform well in October, rising year-on-year by 12% and 24% respectively, in terms of gross merchandise value (GMV)<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Total number of orders placed rises by 6% in the UK and 7% in the US compared to October 2016<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Health &amp; Beauty is the top performing vertical in both the UK and US<\/span><\/li>\n<\/ul>\n<p>Now, let&#8217;s explore each of these points in more detail&#8230;<\/p>\n<h3><strong>Online Retailers Benefit from Increased Online Penetration<\/strong><\/h3>\n<p><span style=\"font-weight: 400;\">There is good news for online retailers this month. According to Brightpearl data, the amount spent by consumers online rose by 12% in the UK compared to October 2016 on a like-for-like basis, which represents a strong performance in light of broader economic indicators. Meanwhile, the performance in the US market for online retailers was considerably stronger than in the UK, with 24% growth on a like-for-like basis. <\/span><\/p>\n<p><span style=\"font-weight: 400;\">Overall the news was good for all retailers in the US according to <\/span><a href=\"https:\/\/www.census.gov\/retail\/index.html\"><span style=\"font-weight: 400;\">the United States Census Bureau<\/span><\/a><span style=\"font-weight: 400;\">. Initial estimates indicate a 4.6% annual increase in October 2017 compared to October 2016, with the non-store category (which includes ecommerce, as well as catalog sales) posting annual growth of 6.8%.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The results are reflective of the continued shift in wallet spend from physical stores to online retail. As <\/span><a href=\"https:\/\/home.kpmg.com\/uk\/en\/home\/media\/press-releases\/2017\/11\/brc---kpmg-retail-sales-monitor-october-2017.html\"><span style=\"font-weight: 400;\">the report from BRC-KPMG<\/span><\/a><span style=\"font-weight: 400;\"> on the UK market explains: \u201cOnline penetration rate increased from 22.6% in October 2016 to 23.7% in October 2017, the highest penetration rate since December 2016,\u201d which means that online retailers can continue to benefit from this upward trend. <\/span><\/p>\n<p><span style=\"font-weight: 400;\">This should translate into further rises in the total number of orders throughout the rest of 2017, which has climbed by 6% year-on-year in the UK and by 7% in the US.<\/span><\/p>\n<p>&nbsp;<\/p>\n<h3><strong>Mixed Results by Vertical<\/strong><\/h3>\n<p><span style=\"font-weight: 400;\">Paul Martin, Head of Retail at KPMG, notes: \u201cClothing sales were particularly hard hit. After a brief uptick, fashion sales reverted back to the dreary theme we have seen for a number of months this year. Unseasonably warm weather last month will not have helped, but this is unlikely to be the only reason the new ranges are proving unpopular,\u201d as fashion retailers are also battling with increased costs. He goes on to say: \u201cHealth and beauty products continued to stand out as a strong performer.\u201d<\/span><\/p>\n<p><span style=\"font-weight: 400;\">We decided to explore how these observations translate into the performance by vertical within the Brightpearl data by reviewing the change in share of GMV in October 2016 compared to October 2017.<\/span><\/p>\n<p><img decoding=\"async\" class=\"aligncenter size-full wp-image-3626\" src=\"https:\/\/www.brightpearl.com\/wp-content\/uploads\/2017\/11\/Graph-008-min.png\" alt=\"\" width=\"1226\" height=\"727\" srcset=\"https:\/\/www.brightpearl.com\/wp-content\/uploads\/2017\/11\/Graph-008-min.png 1226w, https:\/\/www.brightpearl.com\/wp-content\/uploads\/2017\/11\/Graph-008-min-300x178.png 300w, https:\/\/www.brightpearl.com\/wp-content\/uploads\/2017\/11\/Graph-008-min-1024x607.png 1024w, https:\/\/www.brightpearl.com\/wp-content\/uploads\/2017\/11\/Graph-008-min-768x455.png 768w\" sizes=\"(max-width: 1226px) 100vw, 1226px\" \/><\/p>\n<p>&nbsp;<\/p>\n<h3><strong>Health &amp; Beauty is Rising Star<\/strong><\/h3>\n<p><span style=\"font-weight: 400;\">Indeed, we can see that the Health &amp; Beauty sector has performed especially well with the largest increase in overall share compared to October 2016, as it increases its share by 4.6% overall. Health &amp; Beauty was also the top performing segment in the US market. <\/span><\/p>\n<p><a href=\"https:\/\/www.digitalcommerce360.com\/2017\/09\/27\/the-big-opportunity-in-online-health-and-beauty\/\"><span style=\"font-weight: 400;\">Digital Commerce 360<\/span><\/a><span style=\"font-weight: 400;\"> points out some key reasons why this sector is especially buoyant, as it explains: \u201cThe margins on health and beauty items are some of the highest in retail, and return rates, at 1%-2% on average, are some of the lowest. Plus, online health and beauty buyers tend to reorder often on the products they like &#8211; so with a really good product or a great loyalty program, a merchant can hook a customer into coming back to buy again and again.\u201d <\/span><\/p>\n<p><span style=\"font-weight: 400;\">These macro factors illustrate why the results in both the UK and US are similar in this vertical.<\/span><\/p>\n<p>&nbsp;<\/p>\n<h3><strong>Weather Changes Buying Behavior<\/strong><\/h3>\n<p><span style=\"font-weight: 400;\">We can also see the impact of the warmer than usual October temperatures on the Apparel, Fashion and Footwear segment in the UK. This was the worst performing segment in the Brightpearl data, as its share of GMV dropped by 3.8%, from 11.2% in October 2016 to 7.4% in October 2017. \u00a0However, this may pick up as the temperature begins to drop in November and the new ranges become more attractive.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">One vertical\u2019s loss is another\u2019s gain as the warmer temperatures drove more outdoor activity, a factor that could be seen in the change in share of the DIY and Gardening vertical, which grew its share of GMV from 4.5% in October 2016 to 5.6% in October 2017. <\/span><\/p>\n<p><span style=\"font-weight: 400;\">In the US market, aside from Health &amp; Beauty (which saw its share increase by 5.4% compared to the last three month average), Sports, Fashion, Luxury Goods and Furniture also all saw marginal increases in share of GMV; meanwhile Gardening &amp; DIY, Consumer Electronics and Homewares were among the segments to lose ground compared to the last three month averages.<\/span><\/p>\n<p><img decoding=\"async\" class=\"aligncenter size-full wp-image-3627\" src=\"https:\/\/www.brightpearl.com\/wp-content\/uploads\/2017\/11\/Graph-009-min.png\" alt=\"\" width=\"1226\" height=\"795\" srcset=\"https:\/\/www.brightpearl.com\/wp-content\/uploads\/2017\/11\/Graph-009-min.png 1226w, https:\/\/www.brightpearl.com\/wp-content\/uploads\/2017\/11\/Graph-009-min-300x195.png 300w, https:\/\/www.brightpearl.com\/wp-content\/uploads\/2017\/11\/Graph-009-min-1024x664.png 1024w, https:\/\/www.brightpearl.com\/wp-content\/uploads\/2017\/11\/Graph-009-min-768x498.png 768w\" sizes=\"(max-width: 1226px) 100vw, 1226px\" \/><\/p>\n<p>&nbsp;<\/p>\n<h3><strong>Prognosis for Full Year 2017<\/strong><\/h3>\n<p><a href=\"https:\/\/home.kpmg.com\/uk\/en\/home\/media\/press-releases\/2017\/11\/brc---kpmg-retail-sales-monitor-october-2017.html\"><span style=\"font-weight: 400;\">As Paul Martin confirms:<\/span><\/a><span style=\"font-weight: 400;\"> \u201cThe burning question for retailers will be whether shoppers are holding off their purchases until Black Friday,\u201d so we will be reviewing November\u2019s data with interest to measure how this impacts online retail on both sides of the pond. <\/span><\/p>\n<p><span style=\"font-weight: 400;\">All retailers will have to prepare strategies for ensuring that consumers continue to spend as we reach the critical months of the year that will dictate how 2017 ends up performing overall. <\/span><\/p>\n<p><span style=\"font-weight: 400;\">In particular, Consumer Electronics and Fashion in the UK and Consumer Electronics in the US will be aiming for strong November and December performances in order to end the year on a high; meanwhile Health &amp; Beauty is already well on course for a strong 2017 performance in both markets.<\/span><\/p>\n<p>&nbsp;<\/p>\n<hr \/>\n<p><span style=\"font-weight: 400;\"><strong>Are you interested in more industry insights like this? <a href=\"https:\/\/info.brightpearl.com\/blog-subscribe\" target=\"_blank\" rel=\"noopener noreferrer\">Subscribe to the blog now<\/a>\u00a0to be the first to know when we publish new reports.<\/strong><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>In this article, we&#8217;ll be diving into October&#8217;s retail data to identify the key themes that emerged last month. Here are the top level highlights:<\/p>\n","protected":false},"author":10,"featured_media":3628,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[114],"tags":[],"class_list":["post-2506","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-market-insight"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v27.6.1 (Yoast SEO v27.6) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>Retail Insights: Which Industry Came Out on Top in October 2017? - Brightpearl<\/title>\n<meta name=\"description\" content=\"In this article, we\u2019ll be diving into October\u2019s retail data to identify the key themes that emerged last month. 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