UK online sales growth for clothing was positive for the first time in five months in July as external social activities restarted following further relaxation of lockdown rules.
The sector, which has suffered throughout lockdown, reported its first positive year-on-year online growth since February, with sales edging up 0.6% in comparison to last month’s fall of 6.5%, according to the latest IMRG Capgemini Online Retail Index, which tracks the online sales performance of over 200 retailers.
Despite some evidence that the relaxation of lockdown rules impacted e-commerce retail during July, with growth down 10% against the previous month, overall sales remained strong – recording growth of 28.3% year-on-year.
Indeed, while people appeared to initially divert spend away from online the week after additional rules were lifted (commencing 5 July) – resulting in a 10% year-on-year drop in growth compared to the previous week – the decline was short-lived and sales for the following week (commencing 12 July) rose again by 27% year-on-year.
The disruption of pandemic spending patterns could also be seen at a category level. In addition to the rise in clothing sales, the warmer weather and increased amount of time outdoors also triggered sales in gardening to soar 96.9% year-on-year, while both the health and beauty and electrical categories saw further rises of 38.3% and 62.4% respectively.
Breaking down the results by retailer type, multichannel retailers continued to outperform their online-only counterparts, recording growth of 45% versus 8.4%.
“The increased options for purchasing and opening up of social and leisure activities has triggered a shift in spending patterns amongst consumers,” notes Lucy Gibbs, managing consultant at Retail Insight, Capgemini. “While some spend has started to be deflected away from online, we are also seeing a change in the category mix; the growth in electricals, and home and garden is starting to ease off, though still strong at 62.4% and 74% respectively. However, the clothing sector, which suffered throughout lockdown, has reported the first positive year-on-year online growth since February; the highest weekly growth seen in the first week of July for womenswear, +16%, and third week for menswear, +24% since lockdown.
“As we navigate the next few months it is crucial that retailers are able to continue to enhance the experience both online and in store to meet changing need and emerging challenges that are facing the retail landscape.”
Andy Mulcahy, strategy and insight director at IMRG, adds: “When non-essential stores reopened in mid-June, there was no discernible impact on online retail demand. On 4 July, we saw a lot more options become available for people to spend their money – pubs, restaurants, theme parks and, most importantly here, holidays. In the week commencing 5 July there was a 10% week-on-week drop in amount spent online compared to the week previous; quite a sharp decline and indicative that people did divert some spend.
“In the week commencing 12 July, year-on-year growth (compared to the same week in 2019) was up 27%, still incredibly strong but the lowest rate recorded since April. So, was this the start of a slowdown in online sales? Possibly not; since then, the extension of quarantine rules forced many to cancel holidays and the last week of July saw growth rates go up again. The difficulties some business sectors are having in coming out of lockdown may mean online retail growth remains very high over a longer period.”