Almost half of consumers (46%) in 2020 made an online purchase that would have previously been made in-store amid the Covid-19 pandemic.
According to a new report by Retail Economics and Natwest, online sales in the retail sector saw five years of growth in just 12 months in 2020 as restriction and lockdowns shifted consumer spending to online, and away from physical stores.
The report showed that online sales accounted for 19% of retail spending in 2019, compared with 28% in 2020.
Covid-19 has also reshaped consumer expectations and confidence, with nearly two in five consumers (36%) surveyed saying that their spending habits and the way they shop have “changed permanently”.
The research also suggests there could be a “strong bounce back” in consumer spending as cancelled holidays, fewer nights out and less commuting boost “discretionary spending power” with one in ten expecting to spend more this year than in 2020.
Additionally the study showed almost two in five (38%) consumers thought their lives would return to normal by June 2021, rising to 55% for normality by September 2021 and 65% for December 2021.
But over a third (35%) believed it will take “more than a year” for normality to return, with these consumers considerably more likely to cut back spending this year compared with more optimistic consumers.
Survey data showed almost a quarter (24%) of consumers purchase a product while in a store, rising to almost half (47%) for 18-24-year-olds.
“Retailers and leisure businesses with traditional business models focused on having a physical presence are having a tough time, but there is opportunity to pivot and focus on digital channels that will help them adapt to the growing demand of online.”
Richard Lim, chief executive, Retail Economics, added that as the pandemic continues to unfold, many retail and hospitality businesses “will remain in survival mode”.
He said: “However, as consumer expectations shift, retail and hospitality business must pivot towards a digital-first proposition that aligns to a new normal. Nimble businesses who are able to react quickly can grasp new opportunities in emerging markets, retain loyal customers and thrive as the industry is reformed.”