Online retail maintains strong start to the year

by | Mar 10, 2021 | News | 0 comments

With the strict lockdown still in place, online retail sales held strong in February, rising by +69.5% Year-on-Year (YoY). That’s according to the latest IMRG Capgemini Online Retail Index, which tracks the online sales performance of over 200 retailers.

Though falling a little short of January’s recording-breaking +74% growth, February’s figures were still significantly higher than the rolling averages of three, six and 12 months (+57.1% +42.5% and +42.7%, YoY respectively).

Breaking the results down further, the positive picture was reflected across all categories, but there were some stand out performers. As the UK Government announced a roadmap out of lockdown and consumers started preparing for greater outdoor freedoms, both beer, wine & spirits and home & garden saw huge spikes in sales, recording monthly gains of +64.7% and +131% YoY.

After a tough 2020, clothing sales also continued last month’s upward trend (+21.3%) and even footwear – the subcategory worst hit by the pandemic – reported growth of +8%. In fact, in the week of the announcement, this rose to +46.7% as consumers looked forward to stepping out of their slippers and back into ‘normality’.

Lucy Gibbs, managing consultant – Retail Insight, Capgemini: “February growth remains strong (+69.8%) as we near a full year since the pandemic closed the high street for the first time. Online growth has been highest in this third national lockdown; however as we approach the year-on-year comparisons against the swings of 2020 we are likely to see some interesting metrics play out over the next few months.

“For example, electricals and home & garden, up 158% and 131% in February, have seen unprecedented growth figures since the pandemic began. This will mean that even if there is continued strong demand in these categories, we are likely to see swings to the negative compared to last year. 

“On the positive side of things, pent up demand will benefit sectors such as clothing where spending has been low throughout the pandemic. Increased reasons to refresh wardrobes and social events making their way back on to the calendar will also provide a much-needed boost and hopefully a strong performance for 2021. We are already starting to see revival in this category (up 21.9% in February); the change in season and the lockdown easing roadmap has put a spring in the step for clothing and footwear sales this month.”

Andy Mulcahy, strategy and insight director, IMRG: “It’s become common for people to look for the ‘new normal’ across industries, but it might be too early to be focusing on that. Instead, it is more useful to think of a ‘current normal’ as things are still so unpredictable and susceptible to sudden shifts in customer behaviour. For example – even though there is a roadmap out of lockdown and the vaccination programme is going well, it’s difficult to anticipate exactly how people will behave as restrictions are eased.

“The ‘current normal’ in retail is for sustained pandemic-high growth rates across almost every product category. During lockdown one (22 Mar-15 Jun), the average rate of growth was +47%; for lockdown three (27 Dec-now) it is +74%. That rate of growth cannot be sustained once we get into April, but the extent to which spend will be diverted strongly away to ‘experience’ options such as travel, going out, live events etc. is a very tough question to answer.”

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