Online Retail is on the Rise, but will it be Sustained?

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By Jessica Houston – Founding 50 Member of the School of Marketing

Online retail sales growth was up 32.7% year on year in May - the highest rate since March 2008 as coronavirus caused shoppers to head online, according to a new IMRG Capgemini study. [1] Categories such as home and garden (up 162.6% year on year), electricals (growth up 102.8%) and alcohol sales (94.9%) have grown considerably whereas online clothing sales have seen a decline. This correlates with an increase in online search demand for these product categories as consumers turn to the internet to research and order essential and discretionary goods.

Could this change in consumer behaviour have a lasting impact on the retail sector, even when the shops reopen?  

 

The Thrill of Online Shopping 

Every week I catch up with friends over Zoom or Houseparty and find that more often than not, the conversation falls to ‘what have you bought this week’? We describe the excitement of adding a product to our online basket, proceeding to checkout and the anticipation while we wait for delivery. What once seemed like an option if you didn’t have time to pop to the shops or you couldn’t get a particular product where you lived, has become the norm.

Some brands are having to adjust their operations to match the demand, including everything from building an e-commerce business, to completely changing how they communicate with their customers. 

As consumers get used to this new habit and an expectation to be able to buy what they want online, when they want it, it will be interesting to see what happens to traditional outlets when lockdown measures are eased.

 

Lockdown Measures Eased as Retailers Open their Doors

Northern Ireland is the first to allow non-essential shops to reopen to the public, and England will be following shortly behind. In Belfast, footfall was still considerably down on pre-pandemic levels, with lousy weather likely putting off some people from heading back to the city centre. [2] There are also social distancing and hygiene measures in place for those visiting stores for safety. These changes are going to impact the shopper experience significantly, and from conversations, I’ve had, people are still cautious of returning to the shops if they can buy online. 

New data from Edge by Ascential, predicts that e-commerce will get a long-term boost from lifestyle changes as a result of the pandemic, and many categories moving online during lockdown will continue to thrive as consumers have greater motivation, and fewer perceived barriers to spend online actively. [3] 

Given the direction of travel, this is a time for brands to reevaluate both their online and offline offerings, and find new ways to engage customers to drive growth. There is no question about it, online needs to be an essential part of any companies’ strategy moving forward and those brands who listen to their customers and adapt to their changing needs will see the results. 

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