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Marnie Holleron-Silk

The Future of Ecommerce & 2021 Retail Statistics | November 2021

The global Covid-19 pandemic has certainly had a long - term effect on all of us, but how has it affected the retail sector and will there be any lasting implications for ecommerce businesses?

We are all very aware that the ecommerce landscape has been changed indefinitely in the wake of the Covid-19 pandemic, being both fruitful and at times unforgiving. It has also dramatically altered consumers’ spending habits, including where and how they choose to spend their money.

Working with many clients in the ecommerce sector, it is definitely important that Hitsearch as a company keep an eye on the fluctuation of in store vs. online spending. The aim of this is to provide you with some helpful observations that could further help your business to adjust to the long - term effects that the pandemic may have upon the retail industry.

What happened in the first year of the pandemic?

At first it appeared that the impact the Covid-19 pandemic and subsequent lockdown had on ecommerce, all seemed to be good news - with many people working from home with little else to do, consumer behaviour changed in a big way almost immediately. While high streets were closed, the web was still open for business, and so increasingly purchases were made almost exclusively via online orders, - even down to the weekly food shop. Many who were uninformed or unsure about ecommerce, much preferring in-store consumer experiences, were forced to familiarise themselves with the online format due to a lack of options during the first lockdown.

Office-for-National-Statistics-Monthly-Business-Survey-Retail-Sales-InquirySource: Office for National Statistics – Monthly Business Survey – Retail Sales Inquiry

This is reflected in the ONS statistics from 2020 , where the number of people switching from offline to online shopping doubled within a matter of weeks –when February’s data was compared to April’s of that year. We can see from the table above that it was food, department stores, and household goods that experienced the greatest increase, with online clothing stores also displaying a boost in sales but not quite as large a change. What is interesting here is that even after high street stores were gradually allowed to open in August 2020, consumers continued to make an increased number of purchases online, with sales “remaining over 50% higher than the start of the year” (ONS, 2020). It seemed people had become familiar with receiving packages straight to their door, rather than having to leave the house, and many that had perhaps been previously sceptical had grown accustomed to the convenience.

This was fantastic news for businesses who sold most of their product through ecommerce, showing a shifting change in the retail sector and prompting many people to offer online delivery where they hadn’t pre-pandemic.

How has this changed in the last year & what do the 2021 statistics reflect?

It seemed as though there had been a permanent shift in consumer habits, with online purchases being more convenient and working far better around people’s busy schedules. Many in the industry thought that ecommerce sales would only continue to increase more and more, however, this would not be the case. In June 2021, sales in online retail fell at a record rate ( Retail Week, 2021 ).

Ecommerce purchases “dropped 14.1 per cent year-on-year throughout the month” ( Charged Retail, 2021 ), which left many online businesses worrying that the large boost in web sales driven by the pandemic in 2020 may be over.

Office-for-National-Statistics-Monthly-Business-Survey-Retail-Sales-Inquiry2Source: Office for National Statistics – Monthly Business Survey – Retail Sales Inquiry

In comparison, in-store retail sales increased for the first time since the huge hit they took in March of 2020, and in June 2021 were "9.5% higher than in February 2020" ( ONS , 2021) as can be seen in the graph above.

This figure could be a reflection of our slow move back to normality and pre-pandemic society, with restrictions easing more and more after the infamous "Freedom Day" that took place on the 19th of July 2021. With the vaccine now rolled out to every age group in the UK, this statistic could indicate that consumers are finally placing more trust back in the high street and in-person shopping experiences. Having spent so many months in and out of lockdown restrictions and various changes to the rules, it seems that people want the opportunity to be able to interact with retailers in a way they haven’t for a very long time.

What has this meant for those in the retail sector, both online and on the high street?

It is predicted that this shift between web and in-person purchases will continue to fluctuate as buyers settle after the excitement of restrictions being loosened. It is likely to plateau once more, becoming more balanced, with a more even split between the two online and offline worlds. Experts believe that businesses with a presence both online and in-store will have to cope with "demand swing and stock challenges across channels to ensure availability for consumers as their shopping habits change" ( Charged Retail , 2021).

For those who run their business purely online these are important statistics to observe, as it could have a drastic effect on web traffic and conversion rates. However, with winter looming and the threat of another lockdown a possibility, we could still return to the favourable statistics of 2020 that displayed a large boost in ecommerce sales.

To sum up…

Overall, we’ve seen a number of statistical anomalies occur over the past eighteen months, with in-store retail plummeting and online sales booming, to a now record drop in ecommerce and the high street profiting more from consumers than it has in years. The retail industry is experiencing extremely rare circumstances right now, so it is hard to predict what may happen next, but it’s important that we keep a close eye on a sector of business that is constantly and unpredictably changing.

If you have a business in the financial sector and would like to up your marketing game or receive some expert information about digital marketing for financial services, then get in touch with a member of our team!

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