IMRG-Capgemini: Solid Online Retail Sales Growth In March

• Despite the imminent reopening of the high street, online sales continued to show solid growth in March, rising by +71.7% Year-on-Year (YoY)
• This growth was strong against the 3-, 6- and 12-months rolling averages (+71.3%, +53.4% and +51.9%, YoY respectively)
• Almost all categories reported positive results, though there were signs of a slowdown from some of the past year’s top performers i.e. electricals, and health & beauty
• Beers and wines bucked this trend, recording lower demand compared to when lockdown began in March 2020, with rates of -6.7% YoY
• Meanwhile, clothing continued its resurgence, with growth of +75.9% YoY

Despite the upcoming end of lockdown and promise of in-person shopping, online retail sales continued to show strong growth in March, rising by +71.7% Year-on-Year (YoY). That’s according to the latest IMRG Capgemini Online Retail Index, which tracks the online sales performance of over 200 retailers. With last March coinciding with the start of lockdown, however, this growth must be put in the context of the resulting sales spiral, which saw overall growth sink to just +3.0% YoY.

At a category level, last month’s results are also reflective of trends witnessed in March 2020. Clothing had another good month (+75.9% YoY) as people began to ready their wardrobes for social occasions being put back in the diary – but this was measured against a plummet of -18.9% this time last year. Meanwhile, two of the past year’s strongest performers saw a slight slowdown in their stellar trajectories – with electricals and health & beauty recording only +78.5% (compared to a high of +206.6%) and +46.5% growth respectively.

Garden yet again emerged as one of the category winners, with sales rising by +120.3% YoY as the easing of lockdown restrictions began to open gardens to guests for the first time this year, and consumers prepare for the sunnier weather. This performance is made even more impressive because it compares to already high growth figures of +224.6% for March 2020.

Beers & wines was the only category to record negative growth, with sales slumping to -6.7% YoY; again however, this tracks against figures of +105.7% for March 2020 as it seems the nation turned to alcohol to get over the shock of lockdown.

Lucy Gibbs, managing consultant – Retail Insight, Capgemini: “March continues to demonstrate strong overall online growth at +71.7%, however as we pass the anniversary of the first UK lockdown, the trends from the last 12 months have started to reach a turning point. Beers & wines was one of the initial categories to benefit, up +105% YoY in March 2020 but down -6.7% this year.  In contrast, the clothing sector dipped to a record low in March last year (-18.9%) but this month all the clothing categories have reported the strongest growth in the last 5 years, up +75.9% overall.  Not only is the comparator for clothing low, but sales will have also been boosted by new season releases, combined with a cautiously optimistic emergence from the latest and longest UK lockdown.   

“As speculated, we are likely to continue to see a reversal of some of the recent highs and lows against an unprecedented year of category swings in 2020.  This will be good news for the sectors which were hardest hit last year, and as stores open alongside an increase in consumer confidence this will hopefully provide a boost in overall spending, with an expectation that online will remaining central to our shopping habits.”

Matthew Walsh, Director of Data and Retail, IMRG: “Online retail is poised for turbulent months ahead as lockdown restrictions ease and social plans become reality. That said, the ‘unlocking’ of physical stores had little immediate impact on the online retail market last year – in fact, we saw a one-month gap between the reopening of non-essential high street shops and restaurants/bars. It was only once bars opened and the ‘Eat Out to Help Out’ scheme arrived that online growth started to fall.

“A similar one-month gap could be expected for 2021, with the high street due to open this month. It will certainly be interesting to find out if pent up demand changes the trading balance or if we will see online retail have breathing space until May.”

Source : IMRG-Capgemini Online Retail Index

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