With a great deal of economic and political uncertainty following the UK referendum’s outcome in favour of leaving the EU, we thought it would be interesting to see how the ecommerce sector has fared in the month since the decision was announced. Has that uncertainty translated into changing peoples’ buying habits?
We have access to data for a range of sites, although it should be noted that not all are our clients. In order to try and keep the numbers reasonably significant, given the short time period, we limited inclusion to sites with at least 10 transactions per day and/or £5000 per week of revenue. This produced a data set totalling over £2.5m revenue in the month after the vote. Sectors represented include electricals, home improvements, fashion, food and gifts.
After showing year on year growth each month throughout 2016 to date, June saw a contraction in revenue of -1.29%, followed by a greater fall of -7.1% in July. This is completely opposite to the trend showed by this cohort of sites in the year to date.
So what does that tell us? There has clearly been a downturn amongst the retailers we have access to and it’s difficult not to lay that at the door of Brexit and the uncertainty it has created. Whilst we wouldn’t want to be accused of talking ourselves into recession, it’s difficult not to see figures like this alongside all the other economic data produced since the 24th June (and yesterday’s interest rate cut) as proof of consumers holding back on spending as they wait to see if their personal circumstances change.
One particular trend that is clear in our data is electricals taking a hit, with these retailers showing the most consistently negative year on year growth figures. Home improvements appear largely unaffected, but that is perhaps because such projects are more long term and committed to before the referendum took place. It will be interesting to see how these perform later in the year when the projects people want to undertake have been decided upon post-Brexit.
Of course, there is a completely mixed bag of performance when you look at the performance of individual sites – some of our clients have seen 200%+ YoY growth despite the overall downturn, so it is not universally a bad time for retailers by any stretch. The general picture does make it look like a good time to redouble marketing and advertising efforts in the retail sector though.