Online retail is back in growth mode, a new report showed on Tuesday with IMRG, the UK’s e-commerce association, announcing 3.2% year-on-year growth, which it said was the first uplift since April 2021.

The first two weeks of September drove the market’s overall revenue increase and clothing retailers experienced their first monthly year-on-year growth in two years. However, an earlier report from BDO had suggested that much of fashion’s online rise last month was driven by heavy markdowns.

That said, IMRG added that optimism is rising among retailers ahead of the crucial Black Friday and Christmas trading seasons.

The group’s Online Retail Index tracks the online sales performance of 220 retailers. And as mentioned, it hadn’t registered revenue growth since April 2021 when the rise was 6.7%. Between then and September 2024 there have been plenty of dips, with only two months when growth was just about flat — or up so little that it counts as flat. They were November 2022 when it was up 0.2% and August 2023 when it rose 0.5%.

As we’ve said, the first two weeks of September were key. Sales rose 11.6% and 10.8%, respectively. But the latter half of the month witnessed declines, although the first fortnight’s rises may give retailers a slightly more positive feeling as we enter the Golden Quarter.

By category, IMRG said standout performers included accessories & hobbies (+21.6%), make-up (+21.3%), fragrance (+18.4%), footwear (+13.5%), and haircare (+11.3%). Clothing as a whole was up 4.2% after a two-year glut.

Andy Mulcahy, strategy and insight director at IMRG, said: “The start of September is the back-to-school week, which is a peak of sorts in retail. That one really saw a big uplift this year whereas the other retail ‘event’ in September (100 days to Christmas) brought negative growth. Overall the month balanced out [as] positive. 

“So where does that leave us? After such a long and miserable period of decline, it feels like there are cautious reasons for optimism. We’ve seen a sustained recovery in traffic growth over the past two months, following declines across 2023 and the first half of this year, plus marginally better conversion. So it feels like we are perhaps inching toward more reliable performance for e-commerce, which is great news for retailers approaching peak.”