Ecommerce Market Data and Ecommerce Benchmarks

Ecommerce Data Commentary: January 2025 +9.50% YOY

Overall Performance

eCommerce sales on the IRP platform saw a 9.50% year-over-year (YOY) increase in January 2025. According to BRC-KPMG retail sales in the UK increased by 2.6% year-on-year last month.

Noteworthy sector growth includes:

• Pet Supplies: +314.07%
• Toys, Games & Collectibles: +146.02%

Strong conversion rates were observed in:

• Arts and Crafts: 4.90%
• Health and Wellbeing: 3.98%

Economic Influences

January sales trends on IRP outpaced those of the wider UK economy with +9.50% YOY growth v 2.2% for UK online non food retail (reported by BRC) and +2.6% YOY for UK retail in general. According to the CBI “The UK’s retail sales slump continued into January”. With the general UK economy only growing 0.1% in the last three months of the year.

• Consumer Caution: Online sales in January were better than expected due to the poor weather. But consumers remain cautious and that is reflected in some sectors struggling at this time of year.
• Macroeconomic Pressures: The UK governments push for growth is having mixed results and the full impact of the Employer National Insurance Increase have yet to materialise. Watch for the fallout on the high street to the benefit of eCommerce. A fall in Bank of England and Euro interest rates may help bolster consumer confidence, but further cuts are not guaranteed.

Key Challenges for 2025:

• Ongoing cost pressures on SME’s continues to dampen business investment and growth.
• Businesses that don’t have real-time visibility on margins and profits will be trading at a disadvantage 2025 market.

Opportunities for Growth

• International Sales: International sales is driving IRP Merchants growth, a weak pound is leading to opportunities for Merchants and Agencies that know how to exploit global trading.

Dan Loughlin, IRP CEO, emphasised, “Ultimately it is People who drive eCommerce success and it takes the right combination of Products & Services to generate wealth for everyone. In 2025 make the right choices.”

Cost and Conversion Trends

• Cost of Sales (COS): CPA% (percentage spent on marketing channels) reached 8.24%, marking a 9.14% YOY increase. The higher CPA% reflects challenges in converting cautious consumers.
• Conversion Rates: January 2025 rates fell YOY from 1.82% to 1.69% (-7.15%), highlighting increased price sensitivity.

Positive Metrics

Despite market tightening, there are bright spots:

• Average Order Value (AOV): £114.33, up 9.64% YOY.
• Average Sale Price per Item: Increased 14.65% YOY.
• Mobile Channel Sales Share: 60.2%.
• International Sales: Up 8.34% to 43.23%

Looking Ahead: Into Q2 and Beyond

Consumer confidence and global trade issues will continue to undermine growth in the retail sector in 2025. Interest rates, tariffs and supply chains will continue to play their part.

• Macroeconomic Shifts: Tariffs may well play a significant role in restructuring global trade and the UK Government may have no choice but to increase taxes or slash spending through the year.
• Customer Acquisition Strategies: For merchants acquiring customers at sustainable costs is critical, significant opportunities remain to grow international markets and capture market share as competitor fall by the wayside.

IRP’s Forecast:

2025 is gearing up to be a difficult year for retail but there are real opportunities for businesses that remain profitable and are ready to capitalise on their market share. Merchants should choose Partner Products and Agency Services wisely, as they both play significant roles in eCommerce success. In all businesses Profit remains the ultimate measure of success.