Online retail booms through lockdown

Covid-19 continued to reshape the retail landscape in May, as consumers acclimatised to the enforced shift of shopping online. The UK’s second month under lock down saw online retail sales swell to a twelve-year high, up +32.7%  in May. That’s according to IMRG Capgemini Online Retail Index, which tracks the online sales performance of over 200 retailers.

Last month’s results were overwhelmingly driven by soaring sales in three categories – home and garden, electricals, and beer, wine & spirit. Likely boosted by May’s record-breaking 266 hours of sunshine, home and garden sales were up +162.6% year-on-year and an equally huge +138% year to date. Meanwhile, as many employees adjusted to the extension of remote working policies, electricals reported its strongest sales on record – up a historical +102.8% year-on-year. Perhaps in a nod to the bank holiday sunshine, sales in beer, wine and spirit also climbed – up +94.9% year-on-year and +78.6% year to date.

Taking a closer look at the results by retailer type, last month’s stellar sales were once again largely generated by multichannel outlets. As they continued to pivot their focus towards online sales, multichannel retailers outperformed their online only counterparts with sales up +53.1% versus +10.1%.

Andy Mulcahy, strategy and insight director, IMRG said: “There has been a lot of talk about the ‘new normal’ and, after two months of exceptional growth rates for online retail, we have to speculate as to what that might be in a retail sense as the shops start to open again. Will online be able to retain its share and, if so, to what extent?

There are two aspects that will greatly influence the answer to that question – demand and culture. Much spend has been forced online, and often in an artificially-inflated way; the huge spike in freezer sales will be a blip for example. We might expect online demand to remain much stronger over the longer-term however, and that online growth has been achieved with clothing, a major category, in negative growth. Once demand returns there, will it be in stores – where 30-minute queues to get in will quickly become tiresome – or online, which is by its very nature socially-distanced? It seems reasonable to assume demand and culture will have been forever altered.”

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