Now the peak season is over, and the stress of Black Friday, Christmas and January sales are behind us, it’s time to evaluate how the eCommerce industry was affected by the global Coronavirus pandemic and the associated changes to consumer behaviour. Industry experts predicted that the eCommerce retail sector would experience the largest peak season ever, with a reported 73% of consumers in the UK anticipated to purchase online - but did those statistics hold up? Was 2020 the biggest and busiest peak season to date? Let’s take a look.
As you know, Q3 is the busiest time of the year for online retailers, with consumers taking advantage of seasonal sales and incentives to purchase their Christmas shopping, and 2020 was no exception. Internet sales as a percentage of total retail sales grew from 18.3% in Q3 2019, to 27% in Q3 2020; a dramatic increase far above the standard annual increase rate that would have predicted sales to be at 20.5-22%. But why did we see this sharp increase in online sales?
There is no doubt that Covid-19 had a substantial impact on the industry and the behaviour of shoppers. Widespread restrictions that were put in place earlier in the year directed consumers to online retail as a safe and risk free way of sourcing their essential and non-essential goods. Even after some restrictions were lifted in areas in October and November, it seems shoppers still chose to shop online as a safer alternative to high street Christmas shopping.
All online retailing in December 2020 saw a 61.4% year on year growth in the UK, a huge increase if you look back over the 13 years of eCommerce online sales. Starting at just 4.2% of all retail sales in December 2007, eCommerce has come a long way to 31.3% in December 2020.
However the month on month growth shows that there was a 6.2% decrease from November 2020. The slight drop in online sales could be attributed to the fact that many areas across the UK experienced lesser restrictions on non-essential shops during the mid weeks of December, meaning they had a greater chance of purchasing their goods in person on the high street. Alternatively, we could speculate that consumer habits and FOMO (fear of missing out) would have influenced shopper behaviour to purchase earlier in order to not miss out on their goods before Christmas. And the concept of FOMO is clearly evident in the gift sector of the eCommerce industry.
Reporting a year-on-year growth of 103.4% in October 2020 and a -6.7% year-on-year growth in December 2020, it is safe to conclude that the buying habits of consumers have changed drastically from 2019 to 2020. People chose to get ahead of the game and purchase their festive gifts early in October, rather than leaving it to the last minute in December (as seen in 2019). Lockdown restrictions are likely to have played a part in this; causing people to purchase early and online to ensure their loved ones didn’t miss out, and those who chose to purchase in December 2020, had more opportunity to buy in person in high street stores rather than online due to the brief relaxation of restrictions in many parts of the country.
So how did other sectors within the retail industry hold up in peak season during a pandemic?
Supermarkets & Food Stores
As we’ve already discussed, covid-19 related restrictions meant that many high street retailers had to close their doors, forcing consumers towards online shopping for all their purchasing needs, be it essential or non-essential. And with many shoppers having to shield due to health complications, or reluctant to visit supermarkets in person due to the coronavirus risk, there is no surprise to see that the percentage of online sales from food based stores increased from 5.6% in November 2019 to 10.9% in November 2020. Supermarkets also benefited from the closure of the hospitality sector, meaning consumers were more likely to have an increased food budget.
Home & Garden
The homewares and household goods sector faced an incredibly large and unseasonal peak during the first lockdown of 2020 in April that decreased again in July. However, they too saw a year on year growth throughout Q3, increasing from 15.8% of total retail sales in November 2019 to 35.1% in November 2020; more time spent at home meant that consumers were more inclined to invest in their homes and gardens. It’s likely that Black Friday sales contributed to the spike in sales in November 2020, indicating that more people took advantage of the retail sales in 2020 than they did in 2019. Reporting a year-on year growth of 89.2% in December 2020, the Home & Garden sector likely benefited from the closure of the hospitality and travel industries, allowing consumers to spend more of their homes to create a more comfortable and enjoyable festive period under lockdown restrictions.
Clothing & Footwear
After a tough year, the clothing and footwear sector saw an increase in online sales around the peak season, increasing from 21.1% in November 2019 to 47.5% in November 2020. With a year-on-year growth of 6.4% in November 2020, the overall clothing sector managed to end the year in a better position. Aside from the usual Christmas shopping that takes place in Q3, the increase in sales could be attributed to ‘retail therapy’. With restrictions on travel, shopping, socialising and even work, there is no doubt that the general public morale was low, and online clothes and footwear shopping brought some well needed relief.
The electricals online retail sector saw a boom in 2020 Q3, reporting a 116.9% year-on-year growth in December. Despite the Black Friday sales in November, December 2020 still managed to produce a high growth percentage.
With over a third of UK workers being placed on furlough during 2020, resulting in lower incomes, the growth in the electricals market may seem uncharacteristically high. It was reported that 51% of shoppers did not plan to decrease their spend over the festive period despite experiencing household income cuts. As discussed earlier, this could be due to consumers wanting to make home life and the Christmas period more comfortable and enjoyable during lockdown restrictions; therefore causing an incredibly high market growth at the end of the year.
It’s safe to conclude that peak 2020 was indeed the largest, peak season that the eCommerce industry has ever seen, with the coronavirus pandemic and widespread restrictions playing a large and key part in that. As we head into 2021 with many of the similar restrictions still in place, how will the eCommerce landscape be impacted in the coming months?
How has the coronavirus pandemic impacted your eCommerce business? Do you expect the pandemic to continue to impact online retail as we head further into 2021? Let us know in the comments below.
 - Office for National Statistics 'Internet sales as a percentage of total retail sales'.
 - IMRG Capgemini 'Sales Index - November 2020'
 - Office for National Statistics 'Retail sales index internet sales'.
 - IMRG Capgemini 'Sales Index - January 2021'
 - IMRG Capgemini 'Sales Index - December 2020'
 - Internet Retailing