How Will eCommerce Brands Perform Now That High Street Retail Is Returning?

*Collaborative Post

Online retail sales experienced a boom in 2020. While shops on the high street had to remain closed for months, online sales surged to a 13-year high.

“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-on-year growth in 13 years,” says Lucy Gibbs, a retail specialist and managing consultant at Capgemini.

Businesses were forced to adapt to the changes quickly and a high number of retailers chose to offer their products online. Some were more successful than others in setting up a profitable online shop in such a short amount of time. Brands utilised tools such as a strong loyalty program to boost their sales and focused on existing customers as well as attracting new shoppers. Ecommerce platforms helped with the transition and allowed businesses to organize their sales and operations as well as implement new marketing strategies.

Retail sales are recovering gradually

Retail sales experienced a gradual increase in volume this year as shops have slowly begun to return to normality. (In February 2021 the numbers had increased by 2.1%, according to research by the Office for National Statistics.) This left many wondering how the slow return of physical retail will impact online-only brands. Will consumers continue to favour online shopping, and are more brands moving to online-only models?

What does this mean for online stores?

“Consumer confidence has recovered to pre-lockdown levels in May as hospitality venues open up, which is good news for retailers. However, this, combined with the arrival of warmer weather in June may see online performance against last year continue to swing to the negative for the next month or so”, Lucy Gibbs explains.

While shoppers are beginning to visit stores on the high street again, online sales fell sharply by 7% in April and May 2021. After such a long time spent indoors the decrease in demand was to be expected. However, the convenience and safety of online shopping will likely help ecommerce sales recover.

Demand for UK goods rises

The decrease in online shopping did not impact the demand for local goods. After lockdown restrictions had been finally lifted, the demand for UK goods grew immensely. The Guardian reported the fastest growth rate since the 1990s. In the same article, Chris Williamson, chief business economist at IHS Markit, spoke of an “unprecedented growth spurt” for the economy.

As stores, pubs and restaurants are beginning to reopen, many people are choosing to spend more time outdoors and visit their favourite shops. Since the pandemic made online shopping common, online stores are expected to continue to thrive.

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