Quarterly Internet Sales increase highest since 2011

The Office for National Statistics (ONS) have just published the monthly retail sales figures for June (pdf Full details  are available on the ONS site.

Overall figures showed a decrease in sales volumes of  0.1% on last month which was below  expectations which were for an increase of 0.3% according to Bloomberg. The weather got a seasonal mention being blamed for the delay in summer clothes sales leading to weakness in that segment.

The ONS on their preferred quarterly view noted continuing significant growth ” The three-month on previous three-month movement in the quantity bought showed continued growth for the sixteenth consecutive period increasing by 1.6%. This is the highest calendar quarter since March 2004 (1.9%) and has been the longest period of sustained growth since November 2007.”

All the figures we quote are now the new seasonally adjusted statistics issued by the ONS. January 2014 was the one year in six when an extra week occurs statistically and we have annotated our headline graph to show an approximately comparable level of sales.

Our Internet sales headlines:

  • Internet food sales at all time high of £109 million and are over £100 million a week for the ninth  consecutive month
  • Internet sales quarterly increase of 6.2%
  • June internet sales down 0.1% on May
  • For every £1 spent in the online retail sector 49 pence was spent on non-store retailing 36 pence in non food stores and 15 pence in food stores!
  • We do think the ONS needs to do more analysis of internet sales as already half are effectively categorised as sales by online retailers virtually irrespective of the underlying goods or services! These average YoY growth figures of over 20%

June and year to date stats for internet sales:

  • Months sales 11.3% (11.4% last month 10.4 % a year ago) of all retail sales
  • Monthly year on year increase of 13.4% (15.5% last month 17.8 % a year ago)
  • Increase on quarter 1 of 2014 6.2% which is the highest quarterly increase since Q3  of 2011 (6.9%)
  • Moving Annual total increases (1) on May 2014 annualised +12.5% (2) on June 2013 +16.5%
  • The UK’s *largest online retailer is included in the group Non-store retailing and this sector shows growth of 14% on 2013 and accounts for nearly 50% of all online retail sales. This is an area which SHOULD just grow & grow unless further analysis is undertaken of this channel!

The ONS words this month are:

“Key Points

The amount spent online increased by 13.4% in June 2014 compared with June 2013 and decreased by 0.1% compared with May 2014. Month-on-month this is the first time since January 2014 we have seen a decrease (2.1%).

Internet Sales in Detail

Seasonally adjusted Internet sales data are provided within this release. These seasonally adjusted estimates are published in the RSI Internet tables (196 Kb Excel sheet) and include:

  • A seasonally adjusted value index; and
  • Year-on-year and month-on-month growth rates.

Internet sales are estimates of how much was spent online through retailers across all store types in GB. The reference year is 2010=100.

Key Points

  • Average weekly spending online in June 2014 was £728.9 million. This was an increase of 13.4% compared with June 2013.
  • The amount spent online accounted for 11.3% of all retail spending excluding automotive fuel, compared to 10.4% in June 2013.
  • The online spend in department stores increased by 10.3% year-on-year, this is the lowest spend online in this store type since November 2011 (9.5%).

Table 5 shows the year-on-year growth rates for total Internet sales by sector and the proportion of sales made online in each retail sector.”

Table 5: Summary of Internet Statistics for April 2014 (seasonally adjusted) We have added our annotations to the ONS table – The bold categories/ figures in the table are the primary constituents of the total (ie (a) + (b) + (c) = All retailing). Dept. stores, Textile etc, Household etc and Other stores are simply an analysis of (b) All non-food.

We have also added the weekly Internet sales figures by sector and the proportion they represent of all online sales.

Sector summary

The non-store retailing sector comprises of stalls and markets, mail order and those retailers that sell mainly online.

+ Whilst the ONS will not confirm the names of specific retailers within categories they did say that retailers selling wholly online with no physical outlets would be included in the Non store retailing category along with eg online  mail order retailers.

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The moving annual total, which we report, moved up again (it has increased EVERY MONTH since January 2009  to an all time high of £36.2.billion an increase in the month  of  1.2% annualised 12.5%. The average this year is 15.2%. The long term compound average growth rate is around 23%.

The published weekly figure was £728.9 million which was marginally below our estimate as was  the moving annual total at £36..2 billion.

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The average monthly increase this year is  now 1.1% so we’re  going for a little above this level of increase in July so are looking for £735-£740 million and a moving annual total of close to £36.6 billion

We have again included our experimental graph (e & o e!) showing the relative internet and non-internet, moving annual total, sales from late 2007 by month. As before it highlights that high street sales have been and continue to go nowhere! As, we have mentioned before, the Boston Consulting Group forecast  in their report (The $4.2 Trillion opportunity)  that this trend is likely to continue with the high streets market share contracting at around 2.75% a year from 2010 through 2016. Due to the exceptional 5 week month in Jan 2014 there is a 6 yearly jump to allow for the 53rd week!

Further details and explanations are either in the ONS release on the statistics or on their website. As previously mentioned a retail convention of a 4, 4, 5 week quarter is used by the ONS (March June September and December are 5 week months). To cater for the inconvenience of years not having 364 days every 6 years or so an extra week is included in the statistics. The ONS adds this in January which happened this year the previous one being in 2008.

Apple Revenues Still Continue to Flatline

UPDATE 2: July 23

From Apple:

Share price (WSJ) –In after hours trading they ended up about 44c down (0.5%) at $94.28 Today in mid morning trade they are up by around 2.5% at $97.10 ish. We wonder when the magic $100 will be breached – probably before the end of next month!

 From elsewhere:

Instant analyst opinions/headlines:

Our view – Apple still not returning to growth but acquisitions and alliances to the fore

With their revenue guidance of $37 – $40 billion for the three months to September it looks as if revenues on a moving annual total basis will by & large continue to flatline for the 7th successive quarter starting way back in Q2 (March) of 2013. They will have been (billions) $169.1, $169.4, $170.9, $174.0, $176.1, $178.2 and $179.2 (using the mid point of their guidance of $38.5 for Q4 2014).

This period of consolidation has been accompanied by a complete lack of new product range announcements. The last one we would consider to have taken place was the iPad way back in 2010. Prior to this the iPhone first appeared in 2007 and the iPod way back in 2001.

Some think that in addition to new iPhone and TV product announcements this quarter perhaps the iWatch or iTime will be announced for this upcoming holiday season. Some say it could generate volume sales of 30 – 60 million per annum in the first year. We shall see.

What has happened in the last quarter of note is;

  • The acquisition of Beats
  • The announcement of the partnership with IBM in the enterprise market

In the conference call we noticed a few interesting comments re the Apple ecosystem and these developments from Tim Cook:

  1. “Beats provides Apple with a fantastic subscription music service, access to rare talent and a fast growing line up of products that we can build upon.”
  2. “In fact for the first nine months of this fiscal year, the line item that we call iTunes software and services has been the fastest growing part of our business. iTunes billings grew 25% year-over-year in the June quarter and reached an all-time quarterly high, thanks to the very strong results from the App Store. We’re continuing to invest in our incredible ecosystem, which is a huge asset for Apple and a very important differentiator of our customer experience.”
  3. “Yes, we didn’t talk about how the business model (IBM- Apple) is going to work. But generally speaking, I think that each of us have revenue streams in the enterprise and each of us went from having those revenue streams. So that’s how I look at that. And we win if we can drive that penetration number I spoke about from 20% to 60%. That would be incredibly exciting here. The walls would shake. And so that’s what I hope for.”

UPDATE 1: 9.45pm BST July 22

  1. Q3 Revenues / eps $37.43bn / $1.28
  2. Unit sales millions – iPhones 35.2 iPads 13.3 Macs 4.4 iPods 2.9
  3. Guidance Q4 Revenues / eps $37 -$40bn $1.20 (ish)
  4. Closing share price $94.72 Current price (WSJ) Initial after hours reaction down about 50c
  5. We have updated our graph & results schedule below.
  6. More tomorrow but looks like overall performance particularly Q4 guidance is a bit below market expectations.

Apple results, for their Q3 2014 (13 weeks ending June 28) should be released around 9.30 pm BST followed fairly rapidly by their Conference Call at 10pm BST (2pm PDT) which you can listen to live.The, sort of, headline figures to look out for we think are:

  • If their revenues are less than $39bn this quarter the growth rate will for the 5th consecutive quarter on a moving annual total basis show an increase of less than 2%!
  • Quarter 3 results consensus (Professionals/The Street) Revenues / Earnings per share – $38.0bn / $1.23
  • Quarter 4 mid guidance consensus Revenues / Earnings per share – $40.5bn / $1.34

Whilst no new product announcements will be made many think that a new larger iPhone in Q4 and possibly an   iWatch are on the cards but still no sign of an Apple TV.

Click to enlarge

The source of much of our information is Philip Elmer-Dewitt editor of Apple 2.0 to whom we, and likely many others are indebted. Our normal graphic uses his info for the Professionals and Amateurs figures and the mid guidance information from Apple. We also add our guesses. We’re going for a rounded and aggressively high set of results this time!

We will report back later after the results are released . Usually the Q & A session adds value. We shall see, or rather hear, if this continues to be the case and report back tomorrow.

Our header courtesy of Apple is from their Investor News page – impressive!

All Entrepreneurs are Digital

Accenture  in conjunction with the G20 Young Entrepreneurs Alliance  have undertaken some research using various streams including a survey amongst 1,000 entrepreneurs in the G20 countries undertaken by Harris Interactive in March and April this year with 51 coming from the UK and 164 from the USA.

The reports introductory words are:

“Young entrepreneurs are the driving force behind job creation in the G20 countries, powered by their relentless efforts to innovate and embrace digital technologies: social media, mobile computing, big data, cloud and ‘the internet of things’.

New Accenture research concludes that lifting existing barriers: digital skills shortage, logistics at scale, policy and regulation, access to local markets and access to finance, with the help of large companies and other bridgemakers, could help young entrepreneurs to create 10 million more youth jobs in G20 countries.”

We noticed in particular from the survey stream of the research the importance the UK (and US) young entrepreneurs placed on the collaboration with Social technologies, Customers and other SME’s.

The great extent definition is a “key partner for innovation” and the some extent “some experience of collaboration”

Much more in this interesting report which is downloadable here

Keep an I on our Week, Lords above edition

Our top three articles this week were:

  1. 3 2 1 goTenna
  2. Prime Air approaches Takeoff
  3. Consumer Complaints UK vs USA

Our Tech Rich List for 2014 continues to be popular, and Peeks Vision still attracts many eyes!

We’ll leave you with Coldplay’s A Sky Full of Stars

3 2 1 goTenna

This 6 inch long gadget pairs with an iOS or Android device using Bluetooth. It then connects with other goTennas miles away, allowing their paired phones to communicate with one another over peer-to-peer links. It’s mainly an out door device and depending on their presence will operate anywhere in  the world.

Mainly in their words this is how they work.

goTenna enables you to communicate without any need for central connectivity whatsoever—no cell towers, no wifi, no satellites—so when you’re off-grid you can remain connected. In fact, goTenna will even work if your smartphone is in “Airplane Mode”! How does this magic work?

Pair your smartphone to your goTenna device wirelessly, using Bluetooth-LE. Your goTenna needs to be within 20 feet of your phone, so that the two can communicate with each other. Use our free app to type out a text message or share a location. Your smartphone will send the message to your goTenna, which will then shoot it out, via long-range radio waves, to the intended goTenna(s). At the other end, the exact same thing happens, in reverse: the recipient goTenna sends your message over Bluetooth-LE to the smartphone app it’s paired with. All of this happens in a matter of milliseconds.

The goTenna will be able to transmit to any goTenna user within range. What kind of range can you expect? That‘s greatly dependent on your geography. See above to get a sense for what range you can expect in specific environments (open water, suburban, urban, forest, desert) and elevations. Elevating the goTenna increases its range drastically. Another way to improve your range is to attach it externally to other gear (e.g. a backpack), as opposed to having it at the bottom of a bag.

Its forecast to ship in the late autumn and can be preordered (as a pair) at a discounted price of $149.99 from now. Initially available in the USA & Canada you can ask about other country details No doubt if/when there is  UK availability duties taxes & shipping charges will apply

We’ll leave you with their slightly inappropriate video!


Sources: Gigaom & goTenna

We have no commercial arrangements with goTenna.

Consumer complaints UK vs USA

Apparently we lied and cried more than our American cousins when reacting to bad service according to some new research from ClickSoftware! .

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On the frustration front in the UK our top three “badies” are Utility companies, Communication service providers and Central government wheras in the USA they spend most time attempting to sort problems with Banking, Repair / home services and Insurance.

It’s interesting to see that at current exchange rates the average US hourly wage is only some 11% greater than in the UK. We do though apparently wait virtually a week a year which is more than 20% longer than our cousins.

What to do about it – unsurprisingly ClickSoftware have many suggestions. Here are their US comments “Around half of U.S. adults say companies can provide customers more frequent and exact estimate arrival times via their preferred method of contact (52%) and show they understand them as a customer (49%) to improve their services. Around two in five Americans say companies can proactively update them on the progress of their problem (43%) and share more accurate service estimates by understand the full extent of the job and required part(s) (39%) to improve their services while around one-quarter say companies can provide more opportunity to communicate with service reps (27%), schedule appointments via phone (23%) and schedule appointments via other methods (23%).”

Survey Methodology

USA – This survey was conducted online within the United States between May 12 and 14, 2014 among 2,051 adults aged 18 and older by Harris Poll on behalf of ClickSoftware via its Quick Query omnibus product.

UK – This survey was conducted online within Great Britain between May 13 and 21, 2014 among 2,053 adults aged 18 and older by Harris Poll on behalf of ClickSoftware via its Global omnibus product.

USA & UK – Figures for age, sex, race/ethnicity, education, region and household income were weighted where necessary to bring them into line with their actual proportions in the population. Propensity score weighting was used to adjust for respondents’ propensity to be online.

We beat Germany and Argentina

That’s in the  G20 e-Trade Readiness Index which “… measures the degree to which the G20 countries encourage through policy, regulation and infrastructure cross-border trade using the Internet.

The report is based on a quantitative Index which scores the countries (excluding the EU as a separate entity) across five categories:

  1. Investment climate
  2. Internet environment
  3. International trading
  4. Environment, regulatory and legal framework
  5. The environment for e-payments.”

It is produced by the Economist’s Intelligence Unit and was commissioned by ebay inc.

There are 19 in the G20 ‘cos the EU is the 20th member and wisely, we thought, are therefore not reported on separately by the Intellignce Unit particularly as it would involve gathering data on over an additional 20 counties!

Here are the 5 category scores.

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Our simplistic analysis concludes that the UK could improve and get into the top 3 if it did not loose out so much in the Investment climate where it has only 2/3 of the overall winners score.

The general comments on this category are “The investment climate category in the G20 e-Trade readiness Index measures macroeconomic and political stability as well as demographic factors, such as population, median age and education, that affect the risks and returns associated with investment in a  country. To emphasise the role of technology and SMEs, the extent of ICT investment and access to financing for entrepreneurs are also included. Countries that score well in this category are characterised by high levels of technology investment, a large, young and growing middle class and openness to entrepreneurial ventures.”

We’re surprised that the UK scores so badly and is even below Brazil and only just above Saudi Arabia.

Much more of course in the Economist’s report

Amazon Prime Air Approaches Takeoff

Following its drone / octocopter publicity last December Amazon have now formally applied (July 10) to the Federal Aviation Authority (FAA) as follows.”In order to allow outdoor R&D testing for Prime Air in the United States, we are submitting this petition for exemption pursuant to Section 333 of the FAA Modernization and Reform Act of 2012.”

Interestingly they indicate that they may have already undertaken some testing outdoors in overseas countries.

The overview of their objectives and the reason for Amazon Prime Air is said to be:

“At Amazon, our energy comes from inventing on behalf of customers. Amazon Prime Air, a new delivery system that will get packages to customers in 30 minutes or less using aerial vehicles, is one invention we are incredibly passionate about. We believe customers will love it, and we are committed to making Prime Air available to customers worldwide as soon as we are permitted to do so.”

As far as “exemptions” are concerned the FAA have already granted some commercial ones on a pretty limited basis.

You can download the full amazon petition from the Federal regulations.gov website and, if suitably qualified submit your comments!

We’ll leave you with a rather good runover of Prime Airs progress from Time

Disclosure: We have marketing affiliate arrangements with Amazon.

Keep an “I” on our week, Trent Bridge edition

Our top three articles this week were:

  1. Technology the Canvas, Code the Paintbrush 
  2. Digital Inclusion , the Figures 
  3. Another 4 for O3b

Our Tech Rich List for 2014 continues to be popular. and Peek Vision  still attracts many eyes and has just won a prize over at Tech 4 Good in the Digital Health Category.


Another 4 for O3b

Yesterday O3b Networks (Other 3 billion), the satellite internet provider, launched another 4 satellites from Arianespace’s French Guiana’s spaceport on flight VS0.courtesy of a Soyuz 2 rocket. These 4 will now go through a period of in-orbit testing before being fully integrated into the O3b network.

We reckon that following the initial launch, just over a year ago, this brings their total to 8. Their next launch is due in early 2015 and we will report back thereafter.

It does look to us as if this venture, already backed, to the extent of over $1.3 billion ( we wonder if they will  aim at $3 billion for symmetry reasons) is commercially sound and could  well be used by Google (who are an investor) in furtherance of their extra terrestrial activities.

We’ll leave you with one of their launch/ promotional videos