Online retail sales hit new highs as e-commerce taps in to “new normal”

20th Anniversary Of First Online Sale

COVID-19 continued to reshape the retail landscape in May, as consumers acclimatised to the enforced shift of shopping online.

The UK’s second month under lockdown saw online retail sales swell to a twelve-year high, up a staggering +32.7% YoY in May.

This is according to the latest IMRG Capgemini Online Retail Index, which tracks the online sales performance of over 200 retailers.

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Last month’s results were driven by soaring sales in three categories – home and garden, electricals, and beer, wine & spirit.

Taking a closer look at the results by retailer type, 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% versus +10.1%.

Lucy Gibbs, managing consultant for Retail Insight at Capgemini said: “The demand patterns from April continued through to May, with some product sectors seeing extraordinary sales growth and others still in decline.

“The months most outstanding performance came from the Garden market, reporting a 163% YoY increase, even beating its last period of extraordinary growth during the 2018 summer heatwave. The Electricals market also recorded its highest ever YoY growth since the IMRG Capgemini Sales Index began tracking the sector in 2003.”

Adding: “The ‘stay at home’ message has boosted sales of office equipment, games consoles and televisions.”

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

“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.”

Concluding: “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? It seems reasonable to assume demand and culture will have been forever altered.”

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Alex Douglas

The author Alex Douglas

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