Online & Digital

Online retail sales soar to 10-year high amid Covid-19 crisis

Online sales growth surged to a 10-year high in April, up 23.8% year-on-year, amid the ongoing Covid-19 pandemic.

That’s according to the latest IMRG Capgemini Online Retail Index, which tracks the online sales performance of over 200 retailers. According to the report, the spike in sales was “overwhelmingly” driven by multichannel retailers, which continued to benefit from consumers’ changing shopping habits.

Breaking down the figures at a category level, the hot April weather (combined with lockdown) triggered a rise in gardening sales. Building upon March’s 94.4% year-on-year growth, this April’s sales were up an “unprecedented” +288%.

Meanwhile, electrical sales saw a 102% increase, which IMRG said was likely indicative of remote working requirements and demand for at-home entertainment as consumers navigate home isolation.

However, monthly sales for clothing decreased by 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, said: “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.

He added: “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 of retail insight at Capgemini, said: “Covid-19 has reshaped consumer spending patterns and shopping habits, which has been accentuated by the significant online growth in April.

“Customers have become accustomed to turning to online to fulfil shopping needs as non-essential retailers remain closed.”

She added: “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.”

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