Ecommerce Market Data and Ecommerce Benchmarks

Ecommerce Data Commentary: February 2025 +2.85% YOY

Overall Performance

eCommerce sales on the IRP platform saw a +2.85% year-over-year (YOY) increase in February 2025. According to the ONS UK retail overall sales were estimated to be flat (0.0%) in February 2024.

Noteworthy sector growth includes:

• Toys, Games & Collectibles: +52.58%
• Baby & Child: +50.83%

Strong conversion rates were observed in:

• Kitchen & Home Appliances: 3.35%
• Health and Wellbeing: 3.22%

Economic Influences

February sales trends on IRP outpaced those of the wider UK economy with +2.85% YOY growth v 2.1% for UK online non food retail (reported by ONS) and +1.1% YOY for UK retail in general. According to the BRC “UK Total retail sales increased by 1.1% year on year in February”. Once again Online sales are propping up the overall sales figures with jewellery, watches and fragrances selling well around Valentine's Day.

• Consumer Caution: Online sales in February were better in some sectors but fashion performed poorly. Consumers remain cautious and that is reflected in some sectors struggling at this time of year.
• Macroeconomic Pressures: UK Merchants are already preparing for business cost increases, including increases to the National Minimum Wage, National Insurance contributions, energy price increase and lingering inflation. The threat of a tariff war between global economies has created uncertainty.

Key Challenges for 2025:

• Ongoing cost pressures on SME’s continues to dampen business investment and growth.
• US and retaliatory tariffs from the Euro Zone and China will drive up costs to consumers.
• Selling in international markets may become more important than ever for cash strapped merchants.

Opportunities for Growth

• International Sales: The euro is strengthening against Sterling as UK inflation remains stubborn.

Cost and Conversion Trends

• Cost of Sales (COS): CPA% (percentage spent on marketing channels) reached 9.24%, marking a 30.86% YOY increase. The higher CPA% reflects challenges in converting cautious consumers.
• Conversion Rates: February 2025 rates fell YOY from 1.70% to 1.63% (-4.11%), highlighting increased price sensitivity and consumer belt tightening.

Positive Metrics

Despite market tightening, there are bright spots:

• Average Order Value (AOV): £115.58, up 11.53% YOY.
• Average Sale Price per Item: Increased 14.46% YOY.
• International Sales: Up 10.97% to 43.80%

IRP’s Forecast:

February showed an unexpected weakness in growth - perhaps as Merchants held back dumping stock at lower margins.  March is looking stronger as Merchants clear stock - with growth projecting to come in at 8%.  International sales remain key to achieving positive results.