Steadfast Online Sales Maintained Throughout March
In March 2021, online retail sales continued to demonstrate robust growth, rising by 71.7% Year-on-Year (YoY), according to recent reports. This upward trend is a testament to the resilience of the online retail sector, even as physical stores begin to reopen.
The clothing sector, which experienced a significant decline of -18.9% YoY in 2020, has shown a remarkable turnaround, reporting a growth of +75.9% YoY in March 2021. This impressive increase can be attributed to the new season releases and the cautiously optimistic emergence from the latest UK lockdown.
However, compared to the peak of the COVID-19 lockdown in March 2020, when online alcohol sales spiked by an average of 180%, growth rates have since declined. Beers and wines sales, in particular, dropped by -6.7% YoY in March 2021, a significant decrease from the +105.7% YoY increase seen during the lockdown phase.
The garden category, which saw a growth of +120.3% YoY in March 2021, still lags behind its peak in March 2020 (+224.6% YoY). The electricals and health & beauty categories also showed a slight slowdown in growth, with +78.5% and +46.5% YoY respectively, compared to their past highs.
Matthew Walsh, Director of Data and Retail at IMRG, predicts turbulent months ahead for online retail as lockdown restrictions ease. He suggests that the opening of bars and the 'Eat Out to Help Out' scheme in 2020 led to a decline in online growth, and anticipates a similar trend this year as social plans become reality and physical stores reopen.
Lucy Gibbs, managing consultant at Capgemini, made the statement that March continues to demonstrate strong overall online growth. She also expects an increase in consumer confidence to provide a boost in overall spending as stores reopen.
However, Walsh expects a one-month gap between the reopening of non-essential stores and the potential impact on the online retail market, similar to the pattern observed in 2020. The 'unlocking' of physical stores last year had little immediate impact on the online retail market, and it will be interesting to see if pent-up demand changes the trading balance or if online retail has breathing space until May.
The trends from the past 12 months have started to reach a turning point, as indicated by the performance of categories like beers and wines. The sectors that were hardest hit in 2020 may benefit from the easing of lockdown restrictions.
Despite this, online shopping is anticipated to remain central to our shopping habits even as physical stores reopen. The clothing sector reported the strongest growth in the last 5 years, with all categories showing positive growth. Overall, the past 12 months have seen unprecedented category swings, and it is likely that these trends will continue, with a reversal of some recent highs and lows.
