• Paul Kelson

Online retail sales reach 12-year high in May

The UK’s second month under lockdown saw online retail sales rise to a 12-year high, up 32.7 per cent year-on-year in May.

The latest IMRG Capgemini Online Retail Index, which tracks the online sales performance of over 200 retailers, showed that sales were overwhelmingly driven by soaring sales in three categories – home and garden, electricals and alcohol.


Likely boosted by May’s record-breaking 266 hours of sunshine, home and garden sales were up 162.6 per cent year-on-year. Meanwhile, as many employees adjusted to the extension of remote working policies, electricals reported its strongest sales on record – up 102.8 per cent year-on-year. Perhaps in a nod to the bank holiday sunshine, sales in beer, wine and spirits also rose 94.9 per cent year-on-year.


However, online clothing sales continued to feel the pressure of weak demand, down 9.8 per cent year-on-year. Within this category, footwear sales were hardest hit (down 16.4 per cent year-on-year), but womenswear and menswear were also down 14.7 per cent and 14.4 per cent respectively.


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 per cent versus 10.1 per cent.


Lucy Gibbs, managing consultant for retail insight at Capgemini, explained that the clothing sector has struggled throughout the lockdown period as shoppers move their focus away from personal fashion, towards home improvement and home entertainment.


"The silver lining for clothing retailers in May was a healthy 37.6 per cent uplift from April, indicating shoppers are showing an increasing interest in updating their wardrobes as lockdown relaxes, time will tell if a gradual return to the ‘new normal’ aid the recovery for clothing to positive growth.”


Andy Mulcahy, strategy and insight director at IMRG, commented: “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?"


He suggested that 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."


Mulcahy added: "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?”

https://www.retail-systems.com/rs/IMRG_Capgemini_Online_Retail_Sales_May_2020.php

13 views

© 2020 by Digital Transformation Consulting