• Although physical shopping was disrupted – in large part due to lockdowns in some countries – multichannel, where stores are used to support online sales in some way, grew in five out of the six countries studied.
  • The UK was the only market where multichannel declined, mostly because of the very strict lockdown which curtailed activity in physical stores for the majority of November and December.
  • The lack of a lockdown in the US resulted in slower online growth than in the other countries studied, with online penetration increasing just 2.1 percentage points due to consumers being reluctant to shop in-person rather than because they couldn't.
Online channel growth accelerated significantly during the holidays, with penetration reaching just over 31% of total sales in the United Kingdom and almost 21% in the United States

Online channel growth accelerated significantly during the holidays, with penetration reaching just over 31% of total sales in the United Kingdom and almost 21% in the United States

Despite lockdowns and disruptions, the Covid-19 pandemic drove increased adoption and growth of multichannel retail in the 2020 holiday period, further cementing its role in retail going forward, new research shows.

In all six countries studied, online channel growth accelerated significantly during the holidays, with penetration reaching just over 31% of total sales in the United Kingdom and almost 21% in the United States, according to the latest report from data and analytics company GlobalData.

In France, online channel penetration reached just over 17%, while in Germany, it was almost 18%. Even countries where online is more embryonic, like Spain and Italy, posted an increase in online penetration to 9.1% and 8.9% of total retail sales, respectively.

However, the research concludes that, despite these headline numbers, the usual narrative of online dominating the retail landscape is too simplistic and does not address some of the nuanced shifts occurring in the retail market.

The main shift is the fact that, in five out of six countries, online sales that are multichannel are growing faster than overall online sales. This means the proportion of online sales supported by a physical store increased during the holidays. In the United States, physical stores supported almost 37% of all sales made through the online retail channel over the holidays – this is up by five percentage points over last year.

In France and Germany, multichannel accounted for 21% and 31% of online sales, respectively. Both were slightly up from 2019, and although gains were very marginal, the fact it increased at all is remarkable given that many non-essential shops were forced to close for part of the trading period, GlobalData says.

In Spain, multichannel accounted for 28% of online sales, up from 26% in the holiday period of 2019. While in Italy, the same number was 27% in 2020, up from 24% in 2019.

The only country where multichannel sales fell was the United Kingdom, and this was because non-essential physical stores were closed for most of the holiday period which reduced the number of people browsing in store before buying online.

"Over 2020 retailers moved quickly to make their operations more multichannel and to get stores to do some of the heavy lifting in servicing online orders. Consumers found options like collect from store and curbside collection very convenient. This is one of the reasons why orders collected from store more than doubled in the US over the holidays. It's also why in countries like Italy, where online has traditionally been less significant, retailers quickly educated shoppers to the benefits of store-collection," says Neil Saunders, GlobalData's lead retail analyst.

In addition to exploring the growth of multichannel, the 'Holiday multichannel: United States, United Kingdom, France, Germany. Italy, Spain' report also assesses how much of the accelerated online growth was a function of true underlying consumer demand and how much was fuelled by pandemic factors such as lockdowns and consumer health concerns.

In all countries, the research found that the pandemic temporarily inflated online penetration. In the UK, where there was a severe lockdown, online penetration increased by almost 12 percentage points solely because of pandemic-related factors. In France, the same figure was five percentage points, and in Germany, it was just over three percentage points.  In Italy, the pandemic inflated online penetration by just over two percentage points.

Spain, which had the shortest shut-down of non-essential stores among the European countries studied, had the lowest uplift of just under two percentage points. The US, where the retail economy was open over the holidays, had the second-lowest uplift of two percentage points.

Although these figures are only a guide to the effect of the pandemic, they underline the importance of not completely extrapolating online penetration during an exceptional time to future periods when circumstances will normalise.

"When all UK non-essential stores were closed for most of the holidays, more consumers were forced to shop online. This is an exceptional event that is not driven by natural shopper preferences. Online penetration will come down as the European economies open back up," Saunders adds.

The findings in the report are drawn from GlobalData's consumer panel which has tracked the shopping behaviours and buying habits of over 107,000 consumers since the pandemic started. GlobalData also drew on detailed data provided to it by individual retailers and on survey data looking at consumer habits and preferences over the holidays.

Download the full research report here.