Online sales growth hits 13-year high

UK online sales growth remained solid throughout December, coming in at +37% year-on-year (YoY) for the month and driving the annual figure to a 13-year high, according to the latest IMRG Capgemini Online Retail Index, which tracks the online sales performance of over 200 retailers.

The index said that after a “turbulent year”, which was underscored by high street closures and restrictions on the consumer way of life, 2020 brought online retail “to the fore like never before” – with a full-year growth figure of +36% (YoY) significantly outperforming the start-of-year prediction of +7.8% (YoY).

As the UK navigated a series of tiered lockdowns, online retail sales in December defied forecasts of a poor Christmas trading period. With sales starting early and Christmas travel plans halted, online shopping continued the momentum it had built throughout the quarter – with sales up 37.6%, across the three months.

This was seen to be largely driven by November’s peak performance of +39% YoY and the Black Friday sales period.

Breaking down the results, the retail index also revealed the holiday period drove significant sales in electricals – up +116% (YoY). As firmer restrictions were put in place and people continued to meet outside, gardening sales were also strong for December – up +165% YoY. These figures round-off an extremely successful year for both categories, with electrical sales up +90.8% YoY and garden sales up + 222.5%.

Meanwhile as social interactions dwindled throughout the year, poor December clothing sales of +3.2% YoY failed to boost the yearly figure of just +1.3%. This was down from 8.2%
in 2019. Footwear was particularly hard hit, down -5% YoY in December and -10.8% overall in 2020.

Other notable spending trends in December include the widening of the gap between multichannel and online only retailer performance – with the two groups recording figures of (+52.4%) and (+11.4%) respectively.

Lucy Gibbs, managing consultant – Retail Insight, Capgemini said: “Retail in 2020 has been fundamentally shaped by the pandemic, which caused disruption to consumer demand norms and a shift in focus to digital channels; reflected in the strongest online Year-onYear growth in 13 years.

“Learnings from 2020 will be crucial as we navigate the uncertainties this year and a sense of a new baseline will take a while to be established.”

She added: “Retailers best set to ride out the storm are those with a strong online presence and the ability to remain nimble, using demand sensing to react to the changing landscape and adapt to surges both instore and online, combined with a readiness to take on opportunities as they come in 2021.”