The reopening of the UK high street last month appeared to have little impact on online retail sales as they spiked to a new 12-year high in June but demand for clothing failed to return with both womens and menswear hit.
Online retail sales growth skyrocketed by 33.9% year-on-year in June, surpassing the previous month’s growth to become the highest annual result since March 2008, according to the latest IMRG Capgemini Online Retail Index, which tracks the online sales performance of over 200 retailers.
The results showed little impact from the re-opening of the high street – building on May’s sharp rise to record further growth of 3.5% month-on-month.
Online clothing sales, however, continued to feel the impact of Covid-19, with the sector the only one to have remained in negative territory as sales fell by 6.5% year-on-year. The decline was underscored by poor performances in footwear, womenswear, and menswear – down 18.4%, 15.1%, and 10.7% respectively.
Taking a closer look at the results by retailer type, last month’s sales were overwhelmingly driven by multichannel sellers as the gap in performance between online-only and multichannel retailers continued to widen, with the latter recording over five times the growth of the former. Continuing the trend from March, multichannel retailers recorded far higher growth for the fifth consecutive month over their online-only counterparts, with sales up 51.7% versus 10%.
“Online sales have continued to go from strength to strength in June, albeit at a slower rate than last month. Clothing is the only sector to have remained in negative year-on-year results online, with footwear down 18%, womenswear down 15%, perhaps surprising as we might expect to see a resurgence in fashion due to pent up demand as restrictions ease,” notes Lucy Gibbs, managing consultant at Retail Insight, Capgemini.
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By GlobalData“The persistent increase in e-commerce will likely translate into new habits that will continue as we transition out of lockdown, however this is expected to be at lower levels than we have seen during the lockdown period. As the weeks continue, we will see if we have reached the turning point in online sales growth and which behaviours are here to stay as spending starts to revert to a ‘new normal’.”
Andy Mulcahy, strategy and insight director at IMRG, adds: “In June, growth for online retail sales was once again at a rate we’ve not seen since 2008, even with the shops open for half of it. So, initially at least, online has proven resilient to the reopening of the other main outlet for retail; the high street. However, as of 4 July, people have more options for how to spend their money, as pubs, restaurants and other leisure spaces have opened.
“So how long will the online boom last? For some categories (such as grocery and beers, wine and spirits) it seems reasonable to assume that some of the regular demand will have shifted online for good, while for other categories the huge surges they have seen might reach natural limits and slow down. It seems remarkable to suggest that we might be seeing the gradual start of that in garden, where in the last week of June for example, growth was ‘only’ 57% – the lowest for that category since lockdown started.”
