Last week, London began to ease its lockdown measures under its Tier Three restrictions, which began on January 6 2021. With stores re-opening, online orders dropped 12 percent. Will this sentiment last forever? We wouldn't bet on it.
As the city returns to its normalcy, something different is also starting to occur: a revival of brick and mortar retail.
In a report from Salesfire, the shoppers in London are flocking to physical stores and reducing their online spending. In fact, online orders are now down 12 percent between April 6 and April 13 – the first week after lockdown.
Where were the biggest drops?
Some categories have experienced more significant drops online than others, the report has found.
According to Salesfire, the online health and beauty categories fell 18.8 percent over the course of the week, with fashion and footwear orders dropping 12.2 percent and nine percent, respectively.
Are these expected results?
E-commerce is already a pretty established platform in England and Wales, so the drop in orders doesn’t impact the grand scheme of things too much. What’s more, the uplift in online orders throughout the UK was by no means the same as in Australia, which experienced years’ worth of growth in the span of a few months. That being said, the UK did report record numbers during the span of their lockdown measures.
According to the Office for National Statistics (ONS), online spend in the UK increased to 36.1 percent in February 2021. Comparing this to 35.2 percent in January 2021 and 20 percent in February 2020, February is the highest on record.
But as retailers open their doors once again, it should come as no surprise that consumers want to experience the in-store feeling once again.
“A decline in online fashion and footwear orders was expected, as people return to stores to see, touch and try out clothes in person and retailers have been working hard with campaigns to generate excitement at returning to the high street.” Rich Himsworth, the CEO of Salesfire, explained.
“Brands that emphasise their brick-and-mortar stores, such as Primark and TK Maxx, are ahead because their experience requires a personal visit.”
In fact, foot traffic in the UK jumped a whopping 218 percent during the first week of a lockdown-free city, reported Springboard. Moreover, Springboard reported a 340 percent rise in department store traffic.
So, does this mean retailers can expect to see a drop in their online sales going forward? Don’t hold your breath, Himsworth said.
“The convenience of online shopping will continue and may outweigh the experiential aspect for many, particularly for everyday items that don’t need to be seen in person such as electronics,” he shared in a statement.
What does this say about Australia?
Following the exponential growth of e-commerce in Australia during April 2020, Power Retail predicted that online sales would start to slow as the country left the lockdown.
While the slow has undoubtedly begun, we’re still heads and shoulders above the e-commerce stats pre-pandemic. According to the latest Trajectory Report, e-commerce revenue in March is up 38 percent YoY from 2020 to 2021. This is a healthy sign that Australian online rates are increasing, even if the growth isn’t at the same lightning speed as last year.
What’s more, Australia can likely expect online growth in April to be 20 percent above the same period last year – this is the ‘new normal’ we’re all talking about.
When comparing the two countries, we must understand that we are in very different situations with our e-commerce culture. However, we must highlight that even though online experienced a rapid uplift in sales over lockdown, the number can’t last forever.
So, should the UK be worried about losing 12 percent of their online orders in the first week following lockdown? While businesses shouldn’t panic, it is not a time to become complacent.
With services like Click & Collect, next-day delivery, a better understanding of e-commerce and the desire to stay home, online retail will remain tempting for shoppers even as lockdown measures continue to lift – as long as retailers continue to make these experiences as seamless as possible.
“It will be interesting to see whether these trends are a reflection of consumers’ frustrations with lockdown and excitement to get out now that restrictions have eased, or whether the ongoing shift to e-commerce continues in the future,” said Himsworth.
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