By Andy Mulcahy, Strategy and Insight Director, IMRG
- Online retail sales growth was up a staggering +23.8% Year-on-Year (YoY) in April, as high streets across the country remain deserted
- After March’s poor sales this represented a Month-on-Month (MoM) rebound of +28.2%
- Similarly, April’s results were significantly higher than the 12, 6 and 3-month rolling averages (+5.9%, +6.4% and +6.2% respectively)
- The gap in performance between retailer type intensified, with multichannel retailers outstripping their online only counterparts by +35.8% vs. +8.3%
LONDON UK – May 13, 2020: Following the UK’s first full month under lockdown, April’s online retail sales results have signalled a seismic shift in purchasing patterns. As COVID-19 shut brick and mortar stores up and down the county, online sales growth surged to a 10-year high – up an astonishing +23.8% 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.
Taking a closer look at the results, the spike in sales was overwhelmingly driven by multichannel retailers. After recording higher growth than their online only counterparts for the first time in a year in March, multichannel retailers continue to benefit from consumers’ changing shopping habits – with sales up +35% versus online only retailers’ more modest rise of +8.3%.
Breaking down the figures at a category level, the unusually hot April weather (combined with lockdown) triggered a monumental rise in gardening sales. Building upon March’s +94.4% YoY growth, this month’s sales were up an unprecedented +288%. Meanwhile, electrical sales sparked an equally impressive +102% growth – likely indicative of remote working requirements and demand for at-home entertainment as consumers navigate home isolation. Further to their success in February and March, health & beauty sales also continued to soar – with growth of +82%.
Unfortunately, the story was not quite so positive for the clothing sector, with felt the impact of COVID-19 on its monthly sales for the second time as they sunk -23.8% from April 2019. Within this, footwear and menswear sales were particularly poor, down -31.1% and -33.5% respectively.
Andy Mulcahy, strategy and insight director, IMRG: “April’s data shows that demand is following a very logical pattern – with stores closed, people who would usually shop in physical locations have no choice but to switch online. Hence it is the multichannel retailers who are securing the very strong growth at the moment, though whether it will be enough to entirely offset the loss of sales from those stores seems unlikely. This is only true for some categories though; even with stores closed, online growth for multichannel clothing retailers is still down -17.5%. The demand just isn’t there at the moment.
“When that demand will return is a big question for clothing retailers. If they reopen stores – and take their staff out of furlough, bringing all the costs back into the business – but their customers don’t return quickly, there could be a very difficult period coming indeed.”
Lucy Gibbs, managing consultant – Retail Insight, Capgemini: “COVID-19 has reshaped consumer spending patterns and shopping habits, which has been accentuated by the significant online growth in April. Customers to become accustomed to turning to online to fulfil shopping needs as non-essential retailers remained closed. However, despite the positive figures, it begs the question whether this is enough to make up for the full impact of COVID-19 performance particularly for the fashion sector which is still losing out as customers are purchasing for new environments rather than fashion.
“We are also starting to see a differential by retail tier, with mid-market losing out to budget retailers, a trend to watch as consumers seek value for money in uncertainty, however, on the other hand we are likely to see consumers looking for brand trust and quality. This can result in a squeeze in the mid-tier where appealing to both needs has been traditionally harder to balance. Retailers will need to listen to their customers, and find new ways to become increasingly transparent, flexible and innovative in order to navigate the rocky and uncertain road ahead.”
About the ‘IMRG Capgemini Online Retail Index’
The IMRG Capgemini Online Retail Index, which was started in April 2000, tracks ‘online sales’, which we define as ‘transactions completed fully, including payment, via interactive channels’ from any location, including in-store.
*Please note from January 2020 the Index no longer includes data from the travel sector
For over 20 years, IMRG (Interactive Media in Retail Group) has been the voice of e-retail in the UK. We are a membership community comprising businesses of all sizes – multichannel and pureplay, SME and multinational, and solution providers to industry. We support our members through a range of activities – including market tracking and insight, benchmarking and best practice sharing. Our indexes provide in-depth intelligence on online sales, mobile sales, delivery trends and over 40 additional KPIs. Our goal is to ensure our members have the information and resources they need to succeed in rapidly-evolving markets – both domestically and internationally. www.imrg.org
Capgemini is a global leader in consulting, digital transformation, technology and engineering services. The Group is at the forefront of innovation to address the entire breadth of clients’ opportunities in the evolving world of cloud, digital and platforms. Building on its strong 50-year+ heritage and deep industry-specific expertise, Capgemini enables organizations to realize their business ambitions through an array of services from strategy to operations. Capgemini is driven by the conviction that the business value of technology comes from and through people. Today, it is a multicultural company of 270,000 team members in almost 50 countries. With Altran, the Group reported 2019 combined revenues of €17billion.
Visit us at www.capgemini.com. People matter, results count.