April 14, 2014, 5:00 PM

U.K. e-retailers post strongest Q1 performance in three years

Online retail sales increased 17% year over year to more than $38 billion.

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E-retailers in the U.K. saw the strongest first quarter growth since 2011, according to a report from technology consultancy Capgemini and U.K. e-retail association Interactive Media in Retail Group, or IMRG. Sales were up 17% year over year for the first quarter of 2014, to 23.1 billion pounds ($38.7 billion) and 16% year over year for the month of March, from 6.7 billion pounds ($11.2 billion) to 7.8 billion pounds ($13.0 billion).

Conversion rates are also increasing. The average conversion rate for March hit 4.2%, the highest rate for that month since March 2009. U.K. web shoppers are also spending more. The value of the average shopping cart, or basket as it’s known in the U.K hit 86 pounds ($144) in March, its highest rate since September 2012. That compares with just 77 pounds ($129) for February 2014 and March 2013. The average order value figure excludes travel purchases.

The overall e-retail sales increase is due to the increase in basket value instead of more people shopping online, Capgemini and IMRG report.

"With online transaction values reaching the highest level recorded in six months, and the average conversion rate for March at pre-recession levels, these results not only demonstrate an overall increase in consumer confidence, but also that online shopping is becoming a larger part of our everyday lives,” says Tina Spooner, chief information officer for IMRG.

Home and garden items were especially strong in March, rising 21% year over year, Capgemini and IMRG say. “Following the exceptionally wet weather in February, it appears gardening enthusiasts were making the most of the March sunshine, with sales of garden products surging over 100% between February and March,” Spooner says.

Other categories driving the year-over-year growth included accessories (up 34%); footwear (up 22%); and health and beauty (up 23%). “It is interesting to see that spending over the last three months was not limited to just one sector or the result of one particular influence,” says Chris Webster, vice president and head of retail consulting and technology at Capgemini. “Rather, Britons are in good spirits, have regained confidence in the economy and are using online as a means to spend across the board.”

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