It is without a doubt that the Covid-19 pandemic has permanently changed the way ECommerce operates. We have seen a significant contrast between the major online markets before, and during the pandemic. ECommerce giants have been racing to review the future of online shopping and retail behaviour.

According to IMRG, in 2019, the UK online retail sales performance has shown a 6.7% increase as an overall year-to-year growth. This was deemed as the lowest ever growth recorded by the Capgemini online sales index. In comparison to 2018 and 2017, this figure almost doubled when analysing the same markets. On this note, it was concluded that the sector winners of 2019 were Health & Beauty and Clothing, while the 2019 major losers in online shopping, were Electrical and Gardening respectively (Figure 1).      

 

Figure 1: Sector Winners & Losers 2019. Source (IMRG, 2020)

Figure 1: Sector Winners & Losers 2019. Source (IMRG, 2020) 

 

After tracking and analysing 300 retailers across the UK, with 23 billion pounds worth of revenue, it was concluded that not much growth has been recorded before the pandemic in the years of 2019, and early 2020 (Figure 2). 

 

Figure 2: 2019-2020 YoY Growth. Source (IMRG, 2020)

Figure 2: 2019-2020 YoY Growth. Source (IMRG, 2020) 

 

ECommerce managers have struggled to identify the reasons behind these numbers. However, after more investigation, these numbers were presumed to come as a result of: 

  • Reduction in investments due to Brexit 
  • Hesitant shoppers and weak confidence in the market
  • Lack of new technologies: that introduced new shopping behaviours, such as increased Ipads users at 9 (wine) o’clock shopping hour. And mobile devices, which delivered a new shopping window on the morning commute
  • ‘Stuck in Discounting’ phenomena
  • Expenditures and other environmental factors 

It was interesting to note that one of the reasons behind the decline in online shopping growth, was due to the major shift of customers buying online through mobile phones, rather than tablets or PCs as mostly took place prior to the pandemic. 

By March 2020, at the peak of the pandemic, this data was continuously monitored, and has shown unpredictable and rapid disruptions in the eCommerce market figures across the UK. For example, both Electrical, and Health & Beauty industries have demonstrated a staggering growth of sales compared to previous months. Whereas both Clothing, and Footwear, have shown a dramatic decline of online shopping from the early weeks of the pandemic, and to date (Figure 3). In particular, after examining the category growth year-to-date, from January till May 2020, it was observed that the Health and Beauty market has shown a 42% growth, in addition to a 78% increase in sales for the Beer, Wine & Spirits online market. While the Gardening eCommerce has surged by 138% since the pandemic started, the previous winners of 2019, Clothing, declined by 9%, and 20% down for Footwear.    

 

Figure 3: YoY Online Sales Growth. Source (Capgemini, 2020)

Figure 3: YoY Online Sales Growth. Source (Capgemini, 2020) 

 

 According to the FTSE 100 Index, the Covid-19 crisis had rapidly increased the pace in which society normally adopts technology for ECommerce purposes. In light of this, it was recorded that in the UK alone, ECommerce volumes in April 2020 have occupied  31% of the total retail sales, which is 16% higher in contrast with the March 2020. Furthermore, similar numbers have concluded that the online spend has rocketed to the highest on record in April 2020, with 30.7% in response to 19.1% reported in the same month last year.

In the UK alone, retail sales volumes showed a record downturn of 18.1% in April 2020 throughout the Covid-19 pandemic. The following (Figure 4) shows the seasonally adjusted graph of Great Britain’s ECommerce between the period of April 2008, and April 2020.

 

Figure 4: GB Seasonally Adjusted Graph. Source (The FTSE 100 Index, 2020)

 Figure 4: GB Seasonally Adjusted Graph. Source (The FTSE 100 Index, 2020) 

 

In line with this, and given the financial uncertainty of this critical period, it can be concluded that as retail plummets, online sales soars. The opportunity for ECommerce retailers is to simply adapt, or disappear. It is the external catalyst of today’s shopping phenomena, because the trajectory of online shopping has permanently changed, and it will never be the same again. This is not based on opinion or assumptions, yet on facts and carefully studied numbers from the previous months alone compared to years of ECommercetracking and monitoring. 

To make the most out of your current ECommerce platform, please get in touch with Digital Boutique, and we will help you achieve your goals of increasing your online sales and conversion according to the specific criteria of today’s ECommerce trends. 

Our objective is to make sure your response to the evolving situation is constantly compatible with market disruptions, shifts in technology, and various other factors that are directly, or indirectly, related to your unique business. Your online strategy has never been more essential than it is today, and as leaders in ECommerce consultancy, development, design, and user experience, we are here to help.