The acceleration of ecommerce throughout the globe over the course of 2020 was hard to ignore, as consumers shopped online often out of necessity, and brands were forced to rapidly change their strategies as a result.
From consumer behaviour to demand prediction to retention, the events of the last year have altered or sped up almost every facet of online retail.
We’ve rounded up a selection of stats to try to illustrate how the pandemic has impacted, and continues to impact, the ecommerce industry, dating back to April 2020. We’ll update this post regularly as the world of online shopping continues to evolve throughout 2021.
Click the contents below to jump between sections…
- Ecommerce penetration
- Amazon and marketplaces
- Fashion and department stores
- Customer experience
- Black Friday and Singles Day
You can also read Econsultancy’s marketing and advertising stats roundup, again looking at the impact of Covid-19.
And for more on ecommerce, you can explore the following Econsultancy resources:
2021 product subscriptions drop notably in the US
SaaS brand Attest has released an October 2021 report which shows interest in product subscription brands has begun to subside in the US after experiencing high levels of new sales during 2020.
Forty-one percent of US consumers say they currently have an active subscription, down from 47% a year ago. Those with multiple subscriptions have declined as well, dropping from 21% to 18%, while additional data shows that the number of shoppers looking for new product subscriptions has also waned, from 18% in 2020 to 14% in 2021.
Interestingly the number of consumers surveyed that said they have never subscribed to one of these brands has remained the same – 29% – for the last two years, revealing brands have been largely unsuccessful at encouraging firm non-subscribers to convert.
Food and drink subscriptions continue to be the most popular among the US population, with more than one-third (37%) of respondents claiming they subscribe to products in this vertical. Ranked second are personal care/health and fitness subscriptions (36%), followed by pet subscriptions (32%), which have seen the largest jump in growth in recent months, up from 5th place last year.
Despite a drop in active subscriptions, there remains an openness among 65% of Americans to the possibility of purchasing one in the future. Moreover, the percentage of people that say they are unlikely to has reduced from 27% to 21%, meaning there is plenty of opportunity for brands to tempt their audiences into buying subscription products moving into 2022.
39% of Millennial consumers say they didn’t miss shopping in person during the pandemic
Data from eShopWorld on the evolution of digital shopping in recent months has found that 39% of global Millennial-aged consumers did not miss shopping in person during the pandemic, falling to 35% of consumers across all age cohorts.
Instead, Millennials have been the biggest driver of cross-border ecommerce across the world. Thirty-three percent of respondents in this age group made more than 11 cross-border purchases over the last 6 months, indicating that shopping from brands residing in other markets is becoming the ‘new normal’ in ecommerce post-pandemic. Meanwhile, 55% of 25-34 year-olds have made a purchase online directly with an international retailer at least once during a lockdown period.
Other shifts in behaviour revealed by the data shows a disruption to loyalty. Eleven percent of consumers across all age groups claimed to have shopped online with a new brand in the last year, which equates to approximately £280 billion in spend switching between brands.
Traditional retail channels were eroded even further by the increased uptake of social media as a means of purchasing products. Almost half (47%) of global consumers have now bought a product from a social channel, rising to 55% of those categorised as Gen Z or Millennial.
ScS sees 146% growth in annual online sales to July, showing pandemic buying habits and future of furniture shopping
Internet Retailing reports multi-channel furniture retailer ScS saw a 146% year-on-year growth in online sales during the 12 months to July 2021, as customers turned to ecommerce to fulfil their needs. Online shopping via the ScS website totalled £46.9 million, up from £19.1 million, demonstrating the effects of lockdown restrictions on consumer purchasing habits.
The figure helped boost the brand’s total revenue for this period to £310.6 million, a 21.6% increase compared to the year ending July 2020. This is despite the number of orders falling 6.5% on pre-pandemic levels.
ScS claims that large investments in its online channels and digital experience over the pandemic, as well as the launch of its new website at the beginning of 2021, have helped it lift online sales further and cope with higher demand during long periods of lockdown.
So far, in the nine weeks to 2nd October 2021, like-for-like orders are down 21% on the equivalent period in 2020, thanks to a high volume of orders placed between the first and second lockdowns. However, they remain 11.9% higher than the same nine weeks in 2019, indicating a notable shift in the way consumers shop for furniture now that stores have reopened for some time.
Like others, the retailer has warned of potential supply chain disruption during the upcoming festive period, which could have an impact on its fourth quarter results.
Number of out-of-stock products surged 172% between pre-pandemic and August 2021 in the US
In the US, the number of out-of-stock products online, across 18 product categories, surged 172% between January 2020 and August 2021, according to a report from Adobe Analytics. On a year-on-year basis, products were out of stock 24% more of the time in August 2021 than in August 2020, despite more restrictions lifting in the region this summer.
While the report didn’t reveal specific figures across verticals, clothing is reported to be the category with the highest number of out-of-stock products online as of August 2021. Second comes sporting goods, followed by baby products, electronics and pet products.
Quoted in a CNN Business report, Taylor Schreiner, director of Adobe Digital Insights, said of the figures, “We’ve never seen it as high as this for the 10 years or so that we’ve done this report. It’s a record.”
Part of the reason that out-of-stocks remain so prolific, even as the US and the world emerges from the pandemic, is ongoing supply chain issues. Schreiner warns that shoppers should “make two lists for their holiday shopping”, one being a list containing products they should have shipped early to combat any potential shortages in the run up to Christmas.
Ecommerce delivery times could double this 2021 holiday season, as staff shortages continue
A report from Charged Retail has warned ecommerce delivery times could double this holiday season. It cites details from the UK Warehousing Association which states that staff shortages in a combination of driver, supply chain and warehousing roles is causing serious concern over fulfilment during the upcoming peak shopping period. Consequently, brands have been prompted to raise the wages of fulfilment staff by as much as 30% in an attempt to attract them before the Christmas rush.
Another source, speaking to Reuters, said that if the positions aren’t filled, this may cause standard online delivery times to extend to up to 10 days, with some of the hardest hit retailers having to scrap next-day delivery altogether.
Retailers who have so far avoided fulfilment automation during the course of the pandemic are particularly “exposed” to potential disruption, the source also claimed. A rise in overheads, driven by higher labour expenditures, could mean further costs could be passed on to the consumer, in order to keep brands’ margins as viable as possible.
48% surge in global ecommerce app downloads could lead to another record-breaking holiday season in 2021
2021 looks set to be another very busy holiday season for online retailers, as consumers continue to download ecommerce apps in droves throughout much of the year. AppsFlyer’s State of Ecommerce App Marketing 2021 report reveals a 48% global surge in downloads of online shopping apps on mobile between January and July, rising 55% on Android devices and 32% on iOS.
According to the study, the fastest growing regions for online shopping app downloads include markets like Pakistan (up 240% year-on-year on Android), Turkey (up 204% on iOS) and Pakistan (up 140% on Android).
Consumer spending via apps is growing alongside these downloads, with data indicating a 55% increase in worldwide consumer spend on the format between March and July compared with the same period in 2020.
To meet this ever-increasing consumer demand, user-acquisition costs are skyrocketing in several regions. CPI (cost per install) in the UK has been creeping up over the course of 2021, starting at $11.22 in January and reaching $18.22 just two months later in March – a 62% increase. Meanwhile, Germany, which ranked second for overall CPI across the continent, saw a 119% rise from $4.59 to $10.03. The trend has also gained traction across other European markets, but to a much lesser extent.
One year on, Tesco sees online grocery sales grow a further 2.3% above busy H1 2020 levels
Tesco has maintained its momentum in online grocery sales, which grew a further 2.3% (like-for-like) in the six months to August 2021, against a then record-breaking H1 2020. When pitted against pre-pandemic results two years ago, this growth rises to an impressive 74.1%.
According to an interim statement, the supermarket chain now has 6.6 million customers using its online grocery app, while over 20 million households are signed up to its Clubcard loyalty programme to date.
These results are in spite of an increasing number of shoppers opting to shop in-store following the lifting of most coronavirus restrictions in the early summer. Consequently, Tesco is investing even more into its online fulfilment capability, particularly in the run-up to the festive season.
‘Our annual online sales have already exceeded £6bn, boosted by increased demand as a result of the Covid-19 pandemic,’ the statement revealed, ‘We plan to continue this growth whilst constantly innovating to improve efficiency, for example through the roll-out of urban fulfilment centres (UFCs) and continued improvements in our existing manual picking and delivery operations.’
A combination of increased in-store spend and a buoyant online grocery business has resulted in Tesco revising its full-year revenue outlook upwards to £2.5-2.6 billion.
This news comes as rival Morrisons announces a reduction to its online grocery delivery service, removing the pick and pack service from 50 of its stores across the country after seeing online orders subside post-lockdown.
Boohoo reports record £976 million in sales in 6 months to August 2021, doubles market share in two years
Boohoo Group has reported revenue of £976 million in the 6 months to August 2021, according to a recent press release from the brand. This figure is a 20% increase on its interim report the year before, during which the company saw huge growth in online orders amid the coronavirus crisis. These most recent H1 results remain a massive 73% above pre-pandemic sales.
Over the past two years of trading, this means the group has in fact doubled its market share in both the UK and the US.
However, despite the rapid evolution of the brand, ongoing supply chain and fulfilment issues, currently of concern to many online and multichannel retailers, are starting to take effect and could pose a further threat to its H2 2022 margins. As a result of this and a substantial £172 million in new investments, Boohoo’s pre-tax profits were 20% lower in the six months to August 2021 compared to the same period last year.
‘Elevated short-term cost headwinds experienced in the first half are expected to continue in H2 alongside recent freight inflation in our supply chain and wage inflation within our distribution centres,’ the statement read. ‘Consequently, adjusted EBITDA margins are now expected to be 9% to 9.5%, compared to 9.5% to 10% as previously guided.’
The fast-fashion retailer says it expects a 20-30% revenue uplift in the second half of this financial year, equating to a 20-25% full-year growth overall despite complications.
Indian online fashion marketplace Myntra sees record 19 million visitors to its site on first day of its annual Big Fashion Festival 2021
Indian online fashion marketplace Myntra, owned by Walmart, has said it saw a record 19 million visitors to its website on the first day of its annual Big Fashion Festival 2021.
Around 20% were first-time users of the platform, equating to approximately 3.8 million shoppers, far above the brand’s estimates prior to the event which were benchmarked at 1.1 million across the week-long event.
According to a report from Business Standard, 600,000 products were sold in the first hour alone. Before the promotion began, the brand also saw a 43% uplift in the number of customers who had wishlisted items, reaching 8.6 million active customers. Together, they favourited a whopping 83.6 million items.
Beauty and personal care was the most popular category of the day, with sales up 190% compared to the start of the same event the year before. Accessories and sports apparel were the next biggest verticals for sales growth, recording 80% and 75% increases respectively.
The pandemic has seen a rapid uptake of online and mobile commerce in India. Statistics from IBEF show that the country’s ecommerce order volume grew by 36% in 2020, while the total market is predicted to reach $18.2 billion by 2024 (a CAGR of 57%). These figures from Myntra prove what big ecommerce brands have to gain in the region and emphasises the magnitude of the shift in consumer behaviour.
83% of UK marketers feel this Christmas will be a ‘make or break’ period for their businesses
Sitecore’s 2021 Holiday Trends Report has found 83% of marketers feel this Christmas will be a ‘make or break’ period for their organisation, following a challenging past year. Just 15% of respondents said their business had been boosted in spite of, or as a result of, the pandemic over the last 12 months, while 56% said they had seen their profits hindered.
Around 1 in 3 of all brands surveyed say holiday purchases represent the bulk of their annual sales, but inflation and the changing public health situation could have a huge impact on how well they perform in the fourth quarter. Indeed, 92% are somewhat or very concerned about both of these issues. Add to this the fact that a further half (49%) believe online discounting has become more competitive, and the outlook is particularly tough for retailers using digital channels.
This year, 44% of brands plan to offer free samples or gifts with an online purchase, 40% hope to implement an online personal shopping service, and another 40% propose the ability to share a virtual gift wishlist. Interestingly, more than one-third (36%) are also looking to introduce virtual try-ons for the clothing and beauty categories.
With margins tighter than before, as well as an increasing demand for fulfilment, the number of businesses planning on taking part in Black Friday this year is down 4%, while 75% have said they will only offer discounts during the Black Friday/Cyber Monday weekend. However, the report reveals a quarter of UK shoppers have already begun buying Christmas gifts ahead of expected price hikes and product shortages, which could give retailers an earlier boost than usual, and before discount events take place.
Global delivery volumes during 2021’s peak online shopping season could rise a further 10.7% year-on-year
A Q3 2021 report from Metapack suggests delivery records set in 2020 could be broken once more during this year’s Golden Quarter, as ecommerce continues to pull in consumers in the lead up to the holidays. In November 2020, peak delivery volumes grew by 25.4% year-on-year, and although this growth could decelerate in Q4 2021 (with many restrictions having been lifted), we could see a further uplift of 10.7%.
While November and December 2020 saw the largest peaks in delivery volume, this year is expected to be slightly different. According to analysis, October 2021 will record the largest rise (18% year-on-year) as shoppers get their festive shopping started early.
Across the quarter, international shopping is forecast to make up a 20% share of total online transactions, with the remaining 80% purchased and delivered domestically. Even though direct home delivery endures as the most preferred method around the world, Metapack has revealed ‘out of home’ deliveries, such as click and collect and in-store pickup, are still growing in popularity: “we predict consumers will start favoring delivery methods that complement their reclaimed lives outside the home. For example, customers who get their orders delivered to PUDOs or lockers won’t need to worry about missing their delivery when they get called into the office – they can just stop by the locker box at the supermarket on their way home.”
70% of Britons surveyed prefer online shopping to in-store, up from less than half pre-pandemic
Reuters reports new Q3 2021 research from finance startup Credit Karma that reveals 70% of Britons now prefer shopping online and on mobile, up from less than half pre-pandemic.
Meanwhile, more than half also claimed that their online shopping behaviours had increased since the onset of coronavirus, but that their personal finances had been negatively affected as a result. Consequently, 60% of those surveyed admitted to using buy now, pay later services in order to better manage their new spending habits.
The data, which studied responses from more than 1,000 British consumers, found that credit solutions like these are not the only methods shoppers have been implementing over the last 18 months. Usage of online and mobile banking has seen a considerable acceleration, thanks to many branches closing either temporarily or permanently during lockdown. Now, just 8% of consumers prefer to pop into a physical branch than they do using online services, down from 19% before the pandemic began.
UK charities sell 185% more items online in six months to August 2021 compared to the same period a year before
Internet Retailing reports findings from Shopiago that indicate UK charities have sold 185% more items online in the six months to August 2021 compared with the year before. Many of these sales were conducted via marketplace sites like eBay, analysis suggests, as non-profit organisations turned to online channels in an attempt to plug an estimated £10 billion total loss in funding that came with the pandemic.
Certain donation categories have seen a particularly large rise in interest from online shoppers. After an unprecedented spike in pet ownership over the last 18 months, Shopiago has seen a 162% increase in the price of second-hand pet supplies being sold via its platform between February and August this year. Resold donations in the baby category also experienced a 73% rise in pricing over the same period, while those in the toys and games category spiked 104%.
Unsurprisingly, as many employees continued to work from home after the turn of the new year, the number of laptops, tablets and similar equipment sold online by UK charities grew by an impressive 110%.
These upward trends indicate that non-profit organisations have been embracing the power of ecommerce for selling donations (and reaching a larger audience of shoppers) since brick-and-mortar stores were forced to close during the lockdown. In a statement, Thom Bryan, Head of Product at Shopiago, said of the shift,
“More and more UK charities are realising that there is a huge opportunity to generate funds by listing shop donations online and so in future we look forward to growing insight on how trends develop and how consumer tastes change.”
Ecommerce penetration in South East Asia projected to grow 85% year-on-year by end of 2021
Facebook and Bain & Company’s latest annual SYNC South East Asia report has revealed that ecommerce penetration in South East Asia is projected to grow by 85% by the end of 2021, vastly outpacing the growth of other major markets like India (estimated +10%) and China (estimated +5%). Data suggests almost 8 in 10 people above the age of 15 in SEA will be digital consumers by the end of the year, while a further 70 million people in the region have begun shopping online for the first time since the pandemic started.
Digital consumer spend per person in South East Asia is projected to increase by 60% over the course of 2021. The number of consumers who say they ‘mostly shop online’ has increased by 35% year-on-year, and 80% of the channels they use to browse and discover new products are now online. Shoppers within the region have also bought items from 60% more online product categories than they did in 2020, with Indonesian shoppers leading the way by purchasing from an average 8.8 different verticals annually.
In the next five years, analysis predicts SEA’s ecommerce GMV will skyrocket to US $254 billion, almost double what it is expected to reach by the end of 2021 and equating to a compound annual growth rate of 14%. Ecommerce executives who were interviewed for the study believe that, thanks to a mostly hybrid model of working, 75% of the hours consumers spent shopping online from home this year will be retained after the pandemic subsides. This is corroborated by a majority of consumers indicating they would either increase or maintain their levels of spending on key categories.
UK online retail sales reached a record £10bn in July 2021
Charged Retail reports new Adobe research that shows UK online retail sales reached £10bn in the month of July 2021. This marks a record for the highest ecommerce sales ever for the month of July, as well as the largest figure reported so far this year.
It is thought that increased online spend has been somewhat caused by the continued reluctance of UK consumers to return to in-store shopping, as well as a ‘back-to-work spending boost’. Overall, the data indicates that online spending has risen by 18% to £64bn in the year to date, or by 56% versus the same period in pre-pandemic 2019.
A recent Adobe survey of 1,000 consumers indicated that as many as 40% of shoppers are still avoiding shopping in brick-and-mortar environments even though restrictions have lifted. A further 56% said they were avoiding high street settings completely in an attempt to elude infection.
Forty percent of respondents had also returned to the office, with a third of those claiming they had purchased new clothing in preparation. As a result of this renewed interest in office apparel, retailers have seen sales of work attire increase 200% in the six weeks to 31st July.
Shopify revenue up 57% year-on-year in Q2 2021 as the ecommerce boom continues
Shopify posted revenues of $1.12bn in Q2 2021, a 57% rise year-on-year and a better result than estimates from experts predicted ($1.05bn). The company’s Gross Merchandise Volume (GMV) also rose significantly, up 40% to $42.2 billion.
Perhaps most impressive of all was a 67% increase in Shopify’s Monthly Recurring Revenue (MRR), meaning the amount of revenue the brand can expect from recurring payments of users that are billed monthly. In its financial statement, Shopify’s MRR was recorded at $95.1m up from $57m. Subscription solutions, meanwhile, were also 70% higher, thanks to a wave of new merchants joining the platform since Q2 2020.
As brands and businesses continue to make the most of the Covid-19 ecommerce boom, which is slowing only slightly for now, so it is reflected in the financial results of ecommerce tech providers like Shopify. For the remainder of the year, the company predicts its revenue to continue to grow ‘rapidly, but at a lower rate than in 2020’.
91% of ecommerce CMOs believe their brand’s revenue will grow in the next 12 months
Netimperative reports research findings from ChannelAdvisor and CensusWide which reveal 91% of 304 ecommerce CMOs surveyed believe their brand’s revenue will grow over the next 12 months beginning August 2021.
An additional 92% said that they are also more confident in their company’s ability to attract new online customers than they were before the pandemic began, with nearly one-third claiming this will become ‘much easier’ for them.
This could be down to increased investment in digital advertising now that initial uncertainty has subsided. Four in every five ecommerce brands that took part in the study explained that their digital marketing spend has risen this year, while another 91% predict this will rise further over the coming 12 months.
Drilling down, digital marketing efforts have mostly been dedicated to enabling D2C opportunities for consumers, with 36% of CMOs saying their ads were driving traffic directly to their brand websites. Meanwhile, almost three in ten said their clickable digital advertising directed customers to marketplaces like Amazon, and another 20% said they were pointing traffic to retailer partner websites.
As a result of continued expected ecommerce success, the data found ecommerce expertise will be the most in demand type of talent for the sector during 2021 and early 2022. This is followed by marketing talent, while demand for web developers ranked third and senior strategic expertise fourth.
Study shows retail profit margins down from 6.4% to 4.5% in a decade
A study by management consultancy Alvarez & Marsal, in partnership with Retail Economics, has found that pre-tax profit margins for retailers in six European countries (France, Germany, Italy, Spain, Switzerland and the UK) have fallen from 6.4% to 4.5% in the last 10 years, and is forecast to drop to 3.2% by 2025. The chief contributing factor? Likely ecommerce. The study found a negative correlation between share of sales made online and margins.
The study also forecasts that, if the pandemic hadn’t happened, the profit margins in the countries studied would be 3.7% by 2025, half a percentage point higher.
9 out of the top 10 global ecommerce companies saw double-digit revenue growth in 2020
Analysis from GlobalData shows that 9 out of the top 10 global ecommerce companies (by revenue) experienced double-digit growth in 2020 as new consumer habits swayed in their favour.
Pinduoduo came close to triple-digit year-on-year revenue growth at 97.6%, raising its total 2020 sales to $8.6 billion, while South Korea’s top marketplace Coupang saw a 90.8% growth, ranking it 7th overall for 2020 revenue at $12 billion. Amazon unsurprisingly topped the list at a reported revenue of $386.1 billion, although its growth was far lower at (a nevertheless impressive) 37.6%.
Other top performers included US-owned home furnishings marketplace Wayfair, which saw a 55% year-on-year revenue increase thanks to a jump in interest from consumers looking to carry out home improvements, and Alibaba which posted 40.9% growth. Meanwhile, Zalando, eBay and Rakuten experienced a 25.4%, 18.9% and 18.9% rise in annual revenue respectively.
Vipshop Holdings, owner of China’s VIP.com, was the only company on the top 10 rankings to have gained a less than double-digit growth over the course of the year (at 9.6%), but maintained a position of fourth place regardless, with total sales just shy of $15 billion.
UK online sales volumes drop by record amount in May 2021
The IMRG Capgemini Online Retail Sales Index has found that online sales in the UK fell by 9.1% in May 2021 versus a year earlier, Charged Retail reports – the largest drop on record since the Index’s inception in 2000. It is worth noting that this most recent comparison is being measured against a 61% boom in growth recorded in May 2020, which was driven by the first peak of the pandemic.
Sales growth across most retail categories is now flatlining, with some such as health and beauty declining by 29.2% year-on-year. Multichannel retailers saw the largest rate of drop off, -13.9%, as consumers increasingly opted to shop in-store instead. Online-only retailers, however, experienced a much smaller decline of -1.34%. Also hit hard were budget retailers, seeing a -12.8% drop off in sales, in contrast to a +0.2% growth for their luxury counterparts.
Despite this news, online sales overall remain significantly higher than those reported in 2019, before the coronavirus outbreak shifted the landscape of the retail sector. In fact, sales volumes for May 2021 are 46% up compared to May 2019.
British consumers spent £113 billion online in 2020
A June 2021 report from Ofcom has found British consumers spent a total £113 billion online throughout 2020, a rise of 48% on the year before. Online sales in the food and drink category experienced the highest rise of all, up a massive 82% year-on-year, while the household goods category saw a 76% spike. Online share of spending on household goods grew from 17% in Q1 2020 to 42% in Q2 2020 alone.
The online spending power of under-18s has also risen since the first lockdown began in March 2020, driven somewhat by the increased adoption of digital pocket money apps and pre-paid bank cards. According to research, this trend is continuing into this year – teenagers spent 68% of their money online in March 2021 and just 32% offline.
Meanwhile, spend on online entertainment and visual media, which includes streaming services and video games among other products and services, grew to £5.6 billion over the course of the year. Of this surge, audio subscription streaming increased by 23%, driving revenue for the sector up by 19% to £1.3 billion. Audio subscription streaming through platforms like Spotify and Apple Music now accounts for 87% of online audio revenues, up from 84% in 2019.
Overall, the amount of time an average UK adult spent online per day in 2020 was 3 hours and 37 minutes, rising to 4 hours and 34 minutes in 18-24 year olds. This is a substantial half an hour more than the next most digitally focused population in Europe – Spain – which recorded an average 3 hours and 6 minutes online every day.
Global ecommerce sales rose to $26.7 trillion in 2020, making up 19% of all retail sales
Analysis from UNCTAD has found global ecommerce sales rose to $26.7 trillion in 2020, making up 19% of all retail sales (up from 16% in 2019). This increase in share, which the UN has called ‘dramatic’, is reflective of the huge worldwide shift towards online shopping since the onset of coronavirus.
Zooming in, it appears some markets saw a more notable jump in ecommerce sales than others. Data shows that the Republic of Korea experienced the most growth in share, where the proportion of online sales rose from one in five (20.8%) to more than one in four year-on-year (25.9%). For context, China came in at one percentage point lower for total ecommerce penetration in 2020.
The UK also saw big growth compared to regional counterparts, growing from an overall 15.8% online share of retail sales to 23.3%, placing it third in a list of growth in seven major economies which also includes the US, Australia, Canada and Singapore.
Singapore’s ecommerce growth marks it as one to watch as its ecommerce infrastructure develops at a rapid pace. While just over one in every ten retail sales are now made online in the country (11.7%), this figure increased from a tiny 5.9% in 2019.
Kingfisher’s online penetration has grown to 18% from 7% in mid-2019
Online sales penetration across Kingfisher’s brands (which include Screwfix and B&Q) has soared from just 7% in mid-2019 to 18% by the end of 2020, diginomica reports.
In an interview, the retailer’s CEO, Thierry Garnier, revealed just to how extent Kingfisher’s online channels have benefitted from changed shopping behaviours brought about by the pandemic. Its group ecommerce sales rose 158% year-on-year in 2020 to £2.3 billion, with click and collect becoming the fastest growing fulfilment channel, according to its data.
This is thanks to 10 million new customers shopping with Kingfisher brands since the onset of the coronavirus. Recent surveys conducted of their customers showed that 18-35 year olds were driving a large chunk of overall sales, with 20% carrying out DIY projects for the first time, 55% increasing the amount of DIY they have done and 65% feeling more confident in their DIY skills.
B&Q alone experienced a 117% jump in online sales during 2020, while Screwfix performed even better at a 146% increase.
Mobile transactions saw the biggest shift for the retail giant. Sales on mobile devices now account for 62% of Screwfix’s ecommerce sales, while it accounts for 56% of online orders across all Kingfisher brands – more than a 200% increase year-on-year.
UK January online retail sales grow 74% year-on-year
IMRG Capgemini Online Retail Results for January reveal that UK online sales grew 74% year-on-year in January 2021, which is the largest rate of growth since the start of the first lockdown in March 2020.
Typically, online sales in January are fairly restrained as consumers recover from the Christmas shopping frenzy that occurs in November and December. However, a lockdown announcement for the new year caused a record-breaking growth in sales, with results also far above the 3, 6 and 12-month rolling averages – 46.4%, 44.9% and 41.3% respectively, according to analysis.
Omnichannel retailers were the biggest winners in January, seeing a 99.8% year-on-year rise in sales across their online channels compared to their online-only counterparts, which experienced a smaller (but nevertheless impressive) 31.2% growth. Meanwhile, mobile ecommerce sales soared 169.1%.
Data shows a multitude of categories benefitted from increased online shopping across the month, including health and beauty, which saw sales up 102% year-on-year, and beer and wine (up 105% year-on-year), despite many consumers partaking in the Dry January initiative. Electrical sales remained very high – up 206% – and there was even some promising news for fashion retailers as clothing sales grew 22%.
UK online sales accounted for a record 35.2% of all retail in January 2021
Data from the ONS has found UK online sales in January 2021 accounted for 35.2% of all retail, a record that beats even last May’s high of 34.1%, when the coronavirus crisis was at its first peak.
While retail sales volumes were predictably down 8.2% on December 2020, the proportion of online spending was higher in January than it was in the busiest two months of the retail calendar, November and December, which saw online account for 31.8% and 29.6% of retail sales respectively.
Amid a third national lockdown, 50% of textile, clothing and footwear sales came through online channels in the first month of the year, declining to 37.4% for department store sales and 31.5% for household goods stores. Although online made up just 12.2% of food sales (including grocery) in January, it saw the highest year-on-year growth of 143.5% compared to the same month in 2020.
With little sign of lockdown restrictions lifting any time before spring, it is possible this trend will continue and perhaps experience even higher record proportions of online sales in results published over the next few months.
Since the pandemic began, 46% of UK consumers purchased a product online that they had previously only ever purchased in store
A 2021 outlook report from Retail Economics and Natwest has found that, since the pandemic began, nearly half (46%) of UK consumers have purchased a product online that they had previously only ever purchased in store.
As a wave of new consumers have adapted to online shopping over the last year, the research attempts to determine to what extent these changes will become permanent in the next year and beyond. When asked directly, 32% of consumers surveyed said they expect to continue with their new ecommerce habits in the future, a figure that rises to 40% in 45-54 year-olds.
More affluent households are also more willing to stick with the change. Data shows a positive correlation between those that believe their online shopping behaviours will become permanent and the amount of money they are prepared to spend on products. This is particularly true for higher earners aged between 25 and 44.
Fifty-seven percent of respondents from households earning £96,000 or more per year agreed or strongly agreed that they are likely to spend a higher proportion of their income on retail products online than in store, even after the pandemic subsides. By comparison, just 31% of households earning less than £19,000 said the same.
Once lockdown has lifted once more, it is likely that the increased trend of shopping at retail parks will continue as a more convenient and safe way of shopping at physical stores in instances where online shopping isn’t an option. Reasons typically cited are better parking facilities than at high street counterparts, as well as larger in store and outdoor spaces which enable safer social distancing.
Global consumer mobile spending is expected to reach $270 billion by 2025
Global consumer spending on mobile is expected to reach $270 billion by 2025, having been accelerated by increased mobile activity during the pandemic, according to SensorTower’s 2021-2025 Mobile Market Forecast report. This figure is almost 2.5 times the $111 billion spent throughout 2020 (+30% on 2019), reflecting mobile’s continued dominance over other devices.
The compound annual growth rate across mobile app stores is also predicted to be very healthy over this five-year period, at 21% and 17% respectively on the App Store and Google Play. Meanwhile, app downloads for the 2020 calendar year rose 24% to 143 billion – the highest levels seen since 2016 – and are forecast to reach 230 billion by 2025.
UK consumers led the way last year in spending in Europe, totalling an equivalent $2.9 billion, closely followed by Germany ($2.8 billion) and France ($1.7 billion). By 2025, mobile consumer spend in these regions is expected to grow by 181%, 164% and 170% respectively to equal a collective $20 billion.
Zooming in, SensorTower forecasts that consumer spending on non-game apps, such as streaming service and ecommerce apps, will overtake that of games on the App Store by 2024, while non-game app spend growth will surpass growth from mobile games on Google Play. Overall, non-game apps will account for 49% of all revenue made across both stores by the end of 2025.
Shopify’s Q4 2020 revenue rose 94% year-on-year amid ecommerce boom
Shopify’s fourth quarter 2020 revenue rose 94% year-on-year to $977.7 million, the company announced in February. This figure helped boost Shopify’s overall revenue to $2.9 billion (+86%) across the full financial year.
Its Subscriptions Solutions revenue rose 53% in Q4 2020 alone, due to a number of new merchants joining the platform, the statement explained, likely in a bid to capitalise on the golden quarter rush, . GMV also grew 99% year-on-year to $41.1 billion, as many businesses saw record online sales of goods over the period. In 2020, its merchants’ Black Friday weekend sales reached over $5.1 billion versus $2.9 billion across the same event in 2019.
Shopify has been heavily investing in its product by developing its software, support capabilities and fulfilment processes, as well as introducing Alipay as a payment method. In April, the launch of ‘Shop’, its mobile shopping assistant, allowed customers to personalise their shopping experience to enhance discovery, use accelerated checkout, take advantage of Shopify’s own buy-now-pay-later scheme Shop Pay, and track their orders. Shop garnered 100 million registered users by the close of 2020 and has 19 million Monthly Active Users as of early 2021.
Shopify has also expanded its ‘partner ecosystem’ considerably – a total 42,200 of its partners referred merchants to Shopify in the past year compared to 24,500 in 2019 (an increase of 72% year-on-year). This is not to mention the brand’s recent partnership with TikTok, which helps retailers that use it advertise and sell on the popular social network. TikTokers are now able to shop with more than 800,000 Shopify stores as they scroll through the app, offering much greater promise of visibility for Shopify retailers in the months and years ahead. So far, this partnership has launched in the US and is being rolled out in Europe and ROW early this year.
Uber Eats revenue from online orders was up 224% year-on-year in Q4 2020
Uber has announced that revenue acquired from online food delivery was up 224% year-on-year in Q4 2020 (19% quarter-on-quarter) to $1.36 billion, with delivery bookings rising 128%.
This coincided with the continued rollout of the newly designed Uber mobile app, which now integrates its ride hailing and food delivery services in an attempt to incrementally increase user and revenue growth across both of its offerings. According to its financial statement, the app now drives more than 10% of Uber Eats first-time orders. Meanwhile, the number of restaurants enlisted on the Uber Eats platform rose 75% in the final quarter of last year, indicating a huge growth in interest from both retailers and customers in this arm of Uber’s business.
Additionally, monthly active platform consumers grew 19% quarter-on-quarter to 93 million, with the average customer spending $60 per month across five or more transactions.
Despite the successes of its food delivery service, the number of people booking rides through its app has been hit dramatically by continued restrictions imposed by regional governments. Ride bookings fell 47% in Q4 2020, resulting in a 52% year-on-year decline in ride revenue over the period. High demand for delivery has therefore partly made up for the shortfall in ride hailing over the past year, however, despite Uber’s total revenue rising 13% quarter-on-quarter, it declined by 16% across the whole of 2020.
UK online sales growth hits 13-year high at +36.6% year-on-year for 2020
Total online sales growth in the UK rose by 36.6% year-on-year in 2020 – the largest growth seen since 2007, according to data from the IMRG Capgemini Online Retail Index.
After unprecedented uptake of online shopping out of necessity, local and national lockdowns throughout November and December (traditionally the busiest shopping period of the year) helped to boost the overall yearly figure to even loftier heights. Online retail sales in December remained slightly higher than the year average at +37%, while Black Friday events caused November to take the crown for peak performance at +39%.
Multichannel retailers saw a particularly bumper year for online sales, seeing them surpass the rate of growth of online-only competitors for the first time since 2017 (+57% year-on-year vs. 9.1%). Categories that experienced the greatest success over 2020 were garden (+222.5%) and electricals (+90.8%), the former of which is typically sold by multichannel retailers. However, online sales of clothing performed quite poorly, up just 1.3% in 2020 compared to growth of 8.2% the year before.
There was also good news for mobile commerce, which saw a huge 73% year-on-year uplift after many stagnant years.
Cross-border ecommerce sales grew by 82% year-on-year in 2020
Data from eShopWorld has revealed that cross-border ecommerce sales grew 82% year-on-year in 2020, as globally optimised retailers cashed in on new opportunities.
Sales analysis shows international online shopping slowed quite dramatically in March 2020 before picking up at speed again in April and remaining high throughout the rest of the year. In April alone, cross-border sales exceeded 100% year-on-year growth before peaking at +141% in July.
A survey of over 22,000 consumers from 11 different countries found that 52% claimed to have made six or more cross-border purchases online since the beginning of 2020. Respondents cited lower cost (such as taxes and shipping) and better availability of products than in their home region as key purchase drivers.
The Phillipines ranked highest in the top 10 growing markets for international online sales, experiencing a whopping 258% year-on-year growth in 2020. This was followed by Morocco, Chile and Puerto Rico at 215%, 211% and 203% growth respectively.
US ecommerce penetration accelerated by 10 years in 90 days in Q1 2020
The rate of ecommerce penetration in the US grew by 10 years in a 90-day period in 2020, reaching around 33%, according to data from McKinsey.
The result of this acceleration, brought about by rapid digital transformation, has caused the gap in corporate profits between the best and worst performing brands to widen further than ever before. In total, McKinsey predicts the top quintile of industries that has fared well over the course of the pandemic could accumulate $335 billion additional profit, while the quintile that has fared the worst could lose $303 billion.
Organisations that have invested in superior customer experiences, following the shock of the coronavirus outbreak, have emerged stronger than they did before it began. It is thought that these brands have seen triple cumulative shareholder returns against other companies, according to analysis.
These figures are despite very volatile retail performance over the past year, with April seeing the largest drop in US retail sales ever recorded. Fifty percent of American households are reported to be actively reducing their household spend, while a further 20% have abandoned past brand loyalty in favour of others that were more convenient, inexpensive or had better stock availability.
See how the U.S. has leapt 10 years forward in 90 days’ time from physical channels to e-commerce. Also, how the acceleration in digital transformation by companies is widening the gap between leaders & laggards and more. https://t.co/hybQkCcBmu pic.twitter.com/mBt7mMc0kI
— McKinsey & Company (@McKinsey) November 9, 2020
September 2021 UK online grocery sales at lowest since May 2020, while average basket size falls
UK online grocery sales fell to 12.2% of the total grocery market in September 2021, compared to 13% in the four weeks before, according to a report from The Guardian on recent research by Kantar. This marks online share at its lowest since May 2020 as even more consumers start travelling to brick-and-mortar stores to buy food.
The average household now spends £78.28 when checking out online, which is almost £17 less than what was recorded at the peak of the pandemic, reflecting a move to smaller, more frequent in-store grocery visits, mixed with eating out, rather than big weekly or fortnightly deliveries.
Supermarket prices have increased by 1.3% so far this month, while the number of promotions online and offline have plummeted, analysis indicates. In the four weeks to mid-September, just 27.5% of money spent on groceries were applicable for deals and discounts, which according to Kantar is the ‘lowest level recorded in 15 years’.
Consequently, total grocery sales fell by 1.9% year-on-year during the 12 weeks to mid-September, but remain much higher than before the pandemic began(+8.7%). However, footfall is rising, with supermarkets seeing the highest number of in-store customers all year (outside of Easter) during the first week of September.
Health, beauty and personal care product sales to grow 3x faster online than in-store
Having experienced huge acceleration over the past 18 months, the health, beauty and personal care product category is expected to see even more rapid growth over the course of the next five years, WARC reports. Its sister company, Edge by Ascential, has revealed that sales of such products are expected to grow three times faster in online settings than they are in in-store settings by 2026.
Ecommerce sales of this product category are predicted to reach $358.4bn by this time, at a compound annual growth rate of 12.1% versus just 3.3% for store-based sales. The anticipated market value for health, beauty and personal care at the end of 2021 is $202.3bn.
This growing gap between physical and online sales within the beauty sector demonstrates an increased need, as first identified during the pandemic, for accurate and seamless virtual try-on experiences for consumers. While some retailers have recently made steps in this area, more innovation and investment is required to allow customers to feel confident in making purchases of products that typically need to be sampled in real life.
If the predicted 12.1% compound annual growth rate is achieved, it would mean that ecommerce could account for 26.8% of total retail sales for the vertical. For comparison, ecommerce is expected to account for 19.5% of health, beauty and personal care sales by the end of this year as Covid-19 maintains an influence on shopping habits.
July saw year-on-year UK sales growth for online groceries falling for the first time ever
Kantar research shows 81,000 fewer people bought groceries online in July in the UK, compared to the same four weeks in 2020. Digital baskets shrunk by 8% to £80 and YoY sales growth consequently fell by 2.6%, the first dip on record. Online currently accounts for 13.3% of the market.
The online drop-off comes amid a 5.1% fall in take-home grocery sales for the 12 weeks to 11 July 2021. However, despite this YoY decrease, shoppers still spent £3 billion more compared to the same period in 2019.
Find out more from Kantar.
Data reveals click and collect and online grocery shopping among online shopping habits here to stay
Research from Mood Media, published in June 2021, surveyed more than 8000 consumers from the US, UK, France and China and has revealed new online shopping habits that are most likely to continue post-pandemic, and those that are not.
Ordering online to collect in-store is proving to be a very popular option which consumers are hoping to continue taking advantage of once restrictions lift. In fact, one-third of US respondents cited curbside pick-up as a future preference – more than double the worldwide average of 14%.
Globally, twenty-five percent of consumers have said they would prefer to continue shopping online for groceries rather than venturing in-store, with the UK and US leading this trend, while a further 23% said the same when it comes to buying technology and electronics. France and China are the most keen to remain using online channels when shopping for fashion, declining to 22% globally.
Not all shopping behaviours developed during the Covid-19 pandemic are here to stay, however. The report indicates that 80% of global shoppers now feel comfortable visiting physical retail stores, up from 71% in 2020, with many citing being able to try out products, socialise with friends and discover new products as reasons for doing so.
Nearly two-thirds (60%) say they expect to return to their old shopping habits by the end of 2021, rising to 74% in the US, which could be welcome news for omnichannel retailers. In contrast, the number of consumers who predict their shopping behaviours never to return to pre-pandemic levels is higher in the UK (14%) than the global average (9%), suggesting retail trends may differ in this market in the mid to long term.
So far, just 21% of all respondents said they have returned to their pre-pandemic shopping behaviours.
Walmart’s US ecommerce sales rose 37% year-on-year in Q1 2021
US ecommerce sales for retail giant Walmart rose 37% year-on-year in Q1 2021, and 49% across its international markets, according to a financial statement.
The sharp increase in the retailer’s international ecommerce earnings was perhaps the most surprising figure of all, given its recent divestments of Asda in the UK and Seiyu in Japan. Meanwhile, consistent growth in its US online revenue for the quarter has meant Walmart’s ecommerce sales in the region have more than doubled in the last two years.
One of its brands, Sam’s Club, a membership-only retailer, saw a particularly strong increase in ecommerce sales over the period, jumping 47%. Overall Sam’s Club membership ‘reached an all-time high’, and income (across all channels) grew 12.7%, according to the statement. Consequently, as with other membership-based retailers, Sam’s Club appears to have bucked the recent trend of consumers abandoning brand loyalty in favour of price or convenience.
Doug McMillan, CEO of Walmart says he expects many consumers to resume shopping in person, which could impact the spike in ecommerce growth moving forward: “In the U.S., customers clearly want to get out and shop… We anticipate continued pent up demand throughout 2021.”
Ocado group sees 22% increase in customers served in half-year 2021 results
In June, Ocado released its half-year results for the 26 weeks ending 30th May 2021. It revealed a 22% year-on-year increase in the number of active consumers it was serving, despite the loosening of coronavirus restrictions in Spring 2021 and tough comparison to results from the first peak of the pandemic in H1 2020. Total customers served in H1 2021 reached 777,000 compared to 639,000 the year before, due in part to a decline in basket size as demand for produce slightly reduced amid the reopening of the hospitality sector.
Average orders per week have grown by 19.7% to 356,000 in the six-month period thanks to Ocado’s recently elevated fulfilment capacity brought on by the original wave of the pandemic. Meanwhile, retail revenue rose by nearly 20% to £1.2 billion, with ‘strong new customer and order growth as Covid-19 restrictions ease’ the statement said. According to further data from the Group, weekly ordering habits, which were more widely spread throughout lockdowns, are beginning to return to pre-Covid patterns.
Ocado says it has doubled the number of customers with pre-booked delivery slots in H1 2021, and with plans to open two additional fulfilment centres in the second half of this year, the company says it looks forward to serving even more existing and new customers in the near future.
Online grocery sales slow as shoppers return to stores
Online grocery sales growth slowed to 25% year-on-year in April 2021, down from 92% the previous month as a lift on retail restrictions encouraged more consumers in store. Nielsen data, analysed by the BBC, indicates the number of visits to brick and mortar grocery stores grew by 3%, and till sales rose 4.6% during the month as a result.
In the four weeks to 24th April, customers spent $8 billion at supermarkets versus £1.3 billion on online grocery slots.
An article from Internet Retailing offers further insight into Nielsen’s findings – product categories that were hit the hardest by the pandemic are now seeing some of the best performance, reflecting a gradual change in consumer lifestyle as lockdown eases. Fresh food and deli sales were up 28% year-on-year, followed by health and beauty products (27%) and bakery (15%). Interestingly, the reopening of online hospitality hasn’t impacted alcohol sales as much as initially expected – purchases of this category in supermarkets remained strong at 9% up on April 2020.
Supermarket brands with no online presence, such as Lidl and Aldi, have reaped the most rewards in the 12 weeks to 24th April, seeing sales grow 18.2% and 10.4%, while those with strong online grocery offering saw growth in the low single figures.
Despite online grocers continuing to see much higher year-on-year growth than they did before the pandemic began, it is likely that the trend will continue downwards as many consumers return to old shopping habits.
59% of UK grocery shoppers are more price sensitive than they were before the start of the pandemic
A March 2021 survey conducted by Pricer has found 59% of UK grocery shoppers are more price sensitive than they were before the start of the pandemic, thanks to continued financial uncertainty among consumers. In contrast, just 15% said their price sensitivity had not been impacted by the coronavirus.
Nearly one half (49%) claim to have switched to cheaper own-brand products since the onset of coronavirus, while just over one in five (22%) continued to shop their preferred branded products. However, 60% of those surveyed now say they are more conscious of, and likely to take advantage of, promotional offers in order to make the most of their budgets.
A substantial 43% plan to continue their online booking of delivery slots and click and collect once the pandemic is over, suggesting a permanent shift in shopping habits for some customers.
But convenience is not the only new habit that grocery shoppers have picked up since March 2020. A further 55% of respondents said that they have become increasingly more mindful of purchasing locally sourced produce as they endeavour to make more sustainable choices.
Online share of UK grocery shopping reaches record 14% in January
Amid another national lockdown, and now that many supermarkets have adjusted their services to meet demand, many consumers are opting to order their groceries online this year, reports the Retail Gazette. Analysis of data from Kantar has found that online share of grocery shopping in the UK reached a record 14% in January 2021, thanks to increased spending by older demographics.
Retired households increased their online grocery spend by 229% between January 2020 and January 2021, the findings suggest, proving that older generations are becoming more comfortable with using supermarkets’ online booking and delivery. They now account for 28% of the 6.4 million customers using these services so far in January. Meanwhile, parents have increased their grocery spend by £50 a month year-on-year, thanks to ongoing school closures and home working.
Across online and offline channels, shoppers spent £1 billion more with supermarket brands than they did during the same period last year, with a 23% rise in vegan products purchased as families took part in Veganuary.
Ocado reports 35% revenue growth in 2020
Online-only grocery retailer Ocado has reported a 35% year-on-year revenue growth in 2020 in a financial statement, a result that it claims reflects ‘strong demand for online grocery in the UK’ amid the coronavirus crisis. Total revenue reached £2.19 billion across the year.
Ocado attributes its success to a number of different aspects of its business operation. An additional 500 staff members were recruited last year at the height of demand, and it plans to hire another 600 over the coming year. Forty percent of these recent hires have been designated roles in advanced technology, such as the operation of robotic picking systems.
Furthermore, despite the disruptive effects of the pandemic and resulting uncertainty for customers, the company also stated that it had received ‘leading customer service metrics’ in its joint venture with M&S foods. Q3 analysis from Sobeys, as cited in the results, revealed on-time delivery rates of 98.6%, a 99.6% basket accuracy upon delivery and an overall Net Promoter Score of 87%.
Looking forward to 2021, Ocado says that it will be investing an additional £30 million in technology and its online platform to continue to meet demand and increase efficiency. However, revenue predictions for the year ahead are ‘highly dependent’ on continued coronavirus restrictions, the statement concluded.
Tim Steiner, CEO of Ocado Group commented: ‘The landscape for food retailing is changing, for good. As we look ahead to a post-vaccine world and a return to a new normality, Ocado Group is very well placed to enable our grocery partners worldwide to bring the best customer experience to market, responsibly, with high levels of hygiene and superior, sustainable, and proven economics.’
Tesco’s online delivery capacity doubled in H1 2020 to meet online demand
Tesco’s 2020/21 interim results reveal online delivery capacity doubled to 1.5 million weekly slots as a result of heightened demand at the peak of the coronavirus outbreak in the UK. It also stated that it had served 674,000 vulnerable or shielding customers in the 26 weeks to 29 August 2020.
The report shows the brand spent £533 million on Covid-19 safety measures for its staff and customers throughout the pandemic thus far.
Tesco’s new Chief Executive, Ken Murphy said in a statement, “The first half of this year has tested our business in ways we had never imagined, and our colleagues have risen brilliantly to every challenge, acting in the best interests of our customers and local communities throughout.”
Online share of UK grocery sales doubled in December 2020
The Grocer reports Nielsen figures, published in January, which indicate the online share of UK grocery sales doubled in December 2020 to 12.5%, making last December the biggest on record for the sector.
In fact, supermarkets saw record December sales across all channels, with total sales growing 8.4% in the four weeks ending Boxing Day. Overall, customers spent £12 billion during this period, of which some £1.3 billion went through online channels. Further data shows that 8.5 million UK households, equating to a little over 30% of total households, shopped online for groceries over the festive season – 5.7 million more than in the same month of 2019.
Unsurprisingly, instore visits fell 10%, amid concerns for safety during the second wave of the coronavirus, but consumers spent on average £20 more than usual across both online and offline settings.
Lidl experienced the greatest year-on-year growth for the 12 weeks to Boxing Day at a staggering 20.9%. This was followed by Morrisons, which saw 9.2% growth, while Tesco and Sainsbury’s saw increases of 8.6% and 8.1% respectively.
These figures are despite of last-minute restrictions placed on holiday gatherings in large areas of the UK. This appeared to have caused some consumers to hold back on their spending over the last two weeks leading up to Christmas, buying less traditionally festive foods such as steak, which saw sales up 57% during that fortnight, perhaps as a last-ditch alternative to Christmas dinner. Meanwhile, sales of confectionary rose just 2%, reflecting fewer occasions for socialising and gifting this year than in previous years.
Ocado named 2020’s fastest-growing UK brand
BrandZ has named grocery chain Ocado as the UK’s fastest growing brand in its annual Top 75 Most Valuable Brands report.
The company jumped 16 places in the Top 75 list for 2020, following a 63.3% growth in brand value change since 2019, settling at number 18. Its online-only formula, unlike other brands in the sector which also have brick-and-mortar stores, places it in an excellent position for growth through digital innovation. According to the report, demand for its services during the peak of the pandemic was at 10 times it usual level for the time of year.
Others that have seen particularly fast growth this year also fall within the food category – Deliveroo, growing by 40% in brand value change in 2020, made number 29 on the list, while Just Eat grew by 19%, placing it just below Ocado at number 20.
Vodafone came out on top in the top 75 most valuable brands list, followed by HSBC, Shell, BP and BT, despite all of these brands measuring double-digit declines in brand value since 2019. In fact, just 10 brands out of all 75 experienced growth overall, highlighting the massive impact Covid-19 has had on the majority of verticals. The rest saw declines or flat growth or were new to the list in 2020.
Ebay’s GMV down 7%, active buyers down 2% in Q2 2021
Following Amazon’s latest set of financial results, which revealed its slowest revenue growth since the start of the pandemic, eBay is also showing some signs that the ecommerce boom may be starting to wane for the internet’s most popular marketplaces.
In the three months to June 30th, eBay experienced a better-than-expected 14% year-on-year rise in revenue, reaching $2.7bn in sales. It also saw an increased number of global sellers flock to the platform, increasing 5% over the period to reach 19 million.
However, its Gross Merchandise Volume (GMV) declined by 7% to $221bn and its active annual buyers fell by 2%. It is worth noting that this comparison has been made against an unprecedented quarter for sales and customer growth for eBay in Q2 2020.
While these declines are fairly modest, it does indicate a turning tide for ecommerce as marketplaces and online retailers alike try to retain the numerous customers they have attracted over the past year. Overall, eBay’s GMV remains above pre-pandemic levels recorded two years prior (Q2 2019), but its annual active buyers are 23 million fewer.
Ebay says it predicts its Q3 earnings will total between $2.42-$2.47bn, a lower estimate than experts predicted and a downward trend for its quarterly revenue, which saw a peak of $3bn in Q1 2021.
Wish sees revenue drop 6% year-on-year in Q2 2021
Financial results posted by Wish for the three-month period to June 2021 show the retailer’s revenue fell by 6% year-on-year to $656 million. It also posted a net loss of $67 million on an EBITDA basis, down from a $16 million profit during the same period the year before.
Analysis from investment service The Motley Fool posits that a combination of the reopening of in-store retail destinations across the quarter led, as it has with other online-only retailers, to a slowdown in engagement, app installs and conversion. Another cause is likely connected to the rising cost of digital ads, from which Wish drives a substantial number of sales and new customers. According to The Motley Fool, algorithms that manage Wish’s ad spend cut the amount the company was spending on digital ads as a response to increasing costs, which in turn slowed the retailer’s growth.
As a result, the company saw a 13% drop in app installs over the period, as well as a 15% decline in hours spent by consumers across its app and website. Wish’s Monthly Active Users also took a hit, falling by 22% to 90 million, while the number of consumers that purchased at least one product over a quarterly period dropped by 44%.
However, in a brighter spot amid the gloomy news, those that continued to use the website and app increased the amount they were spending at checkout. Revenue per shopper grew by 21% (equating to an additional $22 per purchase), suggesting that Wish’s most avid customers are more loyal than ever to the brand.
Amazon revenue rises 27% in Q2 2021, marking its slowest growth since the pandemic began
Amazon saw its revenue rise 27% year-on-year in the three months to 30th June 2021, totalling $113bn. While sales for the ecommerce giant remain healthy, this figure did not meet the $115.2bn revenue predicted and marked the slowest rate of growth for the company since the pandemic began.
Amazon Web Services (AWS) continued to perform strongly, with net sales rising 37% to $14.8bn – the second quarter in a row to record over 30% growth across this arm of the company. This, new Chief Executive Andy Bassy explains, is a result of ‘more companies bring[ing] forward plans to transform their businesses and move to the cloud’. Meanwhile, Amazon’s advertising revenues skyrocketed by 87% versus the same period of 2020 as brands ramped up their investments.
Despite the results, Prime Day appeared as successful as ever for Amazon. Prime members bought more than 250 million items during the event, with its Fire TV Stick ranking as the most popular purchase. Customers also spent almost double the amount of money ($1.9bn) than in 2020 on products from third-party sellers in the annual Spend $10, Get $10 promotion, which typically runs for two weeks leading up to the big day.
In its financial statement, Amazon said it expects revenue growth to slow even more significantly to between 10-16% in the third quarter of 2021.
Amazon is now on course to become the UK’s largest retailer by 2025
Thanks in part to a surge in sales during the pandemic, Amazon is now on course to become the UK’s largest retailer by 2025, Charged Retail reported from findings from Edge by Ascential. It is predicted that the ecommerce giant’s total sales will outpace that of Tesco in the next four years, at £77 billion versus £76.1 billion respectively, thereby bumping the popular supermarket off the top spot.
Amazon’s compound annual growth rate over this period is also expected to be much higher (at 16.3%) than Tesco’s (at 3.5%), which is somewhat due to the marketplace’s gradual increase in share of the UK grocery sector since the start of the coronavirus crisis. Growth in Amazon’s grocery category in 2020 alone rose 17.6%.
As ecommerce becomes an ever more popular way of purchasing food products and groceries, this will no doubt give online-only retailers like Amazon gain the edge over those with brick-and-mortar stores and omnichannel offerings. In fact, data suggests that 57.4% of added sales between now and 2025 will take place online, helping the retail sector accelerate by £123.6 billion to reach a £500 billion market value.
Sainsbury’s sales are predicted to rise 4.5% to £42.2 billion by 2025, which will rank the supermarket as the third largest retailer by that time, while Asda is likely to come in fourth place with total sales of £26.7 billion.
Alibaba serves 1 billion active users on its ecommerce platform
In a press release announcing results for the full fiscal year 2021, Alibaba revealed it has now served a total 1 billion active users on its ecommerce platform, including 240 million customers based outside of its primary market of China. Active users in China have grown by 85 million year-on-year, or 32 million quarter-on-quarter. Additionally, mobile Monthly Active Users reached 925 million, up by 79 million on the same period to March 2020.
The year ending March 31st 2021 has marked one of the strongest performances for the retailer to date – total revenue for the group increased a huge 41% in the full year to an equivalent $109.5 billion, and revenue for the quarter alone grew 64% year-on-year.
Overall GMV rose 21% across the year, mostly driven by the home furnishing and FMCG categories, and later by apparel in the first three months of 2021. Further data also found that the longer a customer has been shopping on Alibaba platforms, the higher their annual spend and the more product categories they purchased from. Average annual spend was measured at $1,404 for the fiscal year 2021, however, retention remained high among existing Alibaba customers regardless of their basket size.
The Taobao app endured as Alibaba’s most popular social retail platform this year, and indeed the whole of China, as its livestreaming capability continued to make waves with sellers. GMV for Taobao Live climbed to $76.3 billion, reflecting the ever-growing interest in livestreaming in the region and signalling it to be the next big ecommerce trend in the West.
Amazon revenue jumps 44% year-on-year in Q1 2021
A year on from the start of the coronavirus pandemic, Amazon’s first quarter 2021 results show just how much online shopping and streaming services have accelerated in that short time. Data from its financial statement shows revenue jumped 44% year-on-year from $75 billion to more than $108 billion, beating analysts’ prior expectations. Meanwhile, ‘other’ revenue, which primarily includes sales accrued from advertising, grew a whopping 77%.
Revenue from its subscription services, including Amazon Prime memberships, digital video, audio and ebooks rose 36% to $7.5 billion, while Amazon Web Services grew 32%. Streaming hours on Amazon’s Prime Video platform are now up more than 70% year-on-year, with over 175 million of its >200 million Prime members streaming TV shows and movies over the period.
Amazon says it expects a further 24-30% year-on-year revenue growth in Q2 2021. Following its postponement in 2020, Prime Day has been moved back to June this year, meaning the event will likely boost second quarter results.
Online marketplaces and tech giants make biggest gains in SEO visibility since the pandemic began
Big online marketplaces and tech giants are the ecommerce brands that have made the biggest visibility gains on Google (US) organic rankings since the pandemic began, dominating the top ten ranking list compiled and analysed by Searchmetrics.
Audible.com, owned by Amazon, won the battle for the top spot when it comes to year-on-year visibility growth, experiencing a 567% increase overall on 2019 figures. Verizon.com also performed very well for growth, with visibility up 102%, as did Nintendo.com (up 85%), following exponential interest in its Switch console and the release of its latest Animal Crossing title.
Meanwhile, Apple.com, Amazon.com and Ebay.com dominated the top three places for absolute visibility increase from Google.com in the US, despite experiencing lower levels of year-on-year growth than some others in the top ten.
Notably, there were no fashion ecommerce websites that made it to the list in 2020, reflective of the reduced sales performance this sector experienced at the peak of the pandemic. Analysis shows Macy’s lost more than 20% of its search visibility year-on-year, but this bad news didn’t translate to every fashion brand – ASOS.com, Lyst.com and H&M (hm.com) made the biggest overall gains in this category at 176%, 100% and 79% respectively.
Amazon sales grew 38% in 2020 to $386.1 billion
Amazon’s latest financial statement, released in February, has revealed that sales grew a total 38% throughout 2020, reaching $386.1 billion. Meanwhile, sales of its web services (AWS) accelerated 29.5% to $45.4 billion vs. $35 billion last year.
In Q4 2020, usually the most lucrative time of year for Amazon, the company’s sales increased by 44% year-on-year to $125.6 billion, marking its first ever $100 billion quarter. This was no doubt aided by fresh stay-at-home restrictions across the globe as a second wave of the coronavirus began taking its toll. In the same quarter, 175,000 full-time and part-time employees were hired by the marketplace giant to help keep up with demand, compared with just 50,000 hired in Q4 2019.
It claims that the 2020 holiday season was ‘the best ever for independent businesses selling on Amazon’, with worldwide sales averaging 50% higher year-on-year and exceeding $4.8 billion in sales alone over the Black Friday Cyber Monday weekend. US small and medium-sized businesses sold close to one billion products via the marketplace in the last quarter.
Amazon says it expects revenue to reach between $100-$106 billion in Q1 2021, an unsurprising deceleration from the previous quarter where events like Black Friday and Christmas drove the bulk of consumer spending, but still up to 40% higher than in the same period of 2020.
This comes as Jeff Bezos announces his stepping down from the role of Amazon CEO, instead taking a position as Executive Chairman. The company has confirmed that its current AWS lead, Andy Jassy, will replace Bezos as CEO sometime in the second half of this year.
Alibaba posts 37% rise in revenue for Q4 2020, with its cloud computing services growing 50%
In early February, Alibaba posted its financial results from Q4 2020, which revealed a 37% year-on-year rise in revenue to RMB221.1 billion (or US$33.9 billion).
The company’s overall core commerce grew a total 38% over this period, with the Tmall marketplace faring particularly well – it reached 19% growth in physical goods GMV and a 60% rise in the number of international brands and sellers on its Tmall Global platform. As a result, Tmall Global also experienced triple-digit growth in the purchases of products shipped and warehoused overseas.
A portion of its success can be attributed to its record 11.11 Singles Day sales, expanded last year to continue for 11 consecutive days, which created RMB498.2 billion in sales (US$74.1 billion) – an increase of 26% on the same event in 2019. Alibaba also claimed over 470 of its brand sellers made RMB100 million or more during the holiday.
Customer engagement also rocketed. Taobao Live generated more than RMB400 billion (US$61.8 billion) over the course of 2020, highlighting the huge and growing influence of livestreaming on online shopping in the APAC region. Moreover, views of recommended pages displayed on the Taobao app homepage grew a whopping 90% in the fourth quarter alone.
Aside from its retail achievements, Alibaba’s cloud computing business saw a huge 50% year-on-year boost in Q4 2020, making these services profitable for the company for the first time.
UK online reselling jumped in 2020, according to data from top second-hand sites
The Guardian reports online reselling in the UK saw a substantial boost in sales and traffic throughout 2020, according to information collated by top second-hand sites like MusicMagpie.
Sales at the aforementioned brand, which now resells many other products outside of old music, rose 22% over the course of last year to around £120 million. Sales of second-hand books via the site grew by a massive 75% in this period, while products like preowned smartphones and games consoles saw sales increase by one-fifth.
The most popular items sold included the series of Harry Potter books, Michael Bublé CDs, PlayStation 4 consoles and old versions of the iPhone.
MusicMagpie’s sales figures follow the same trend as similar sites such as eBay which saw a 30% growth in revenue between March and June last year alone. Meanwhile, Depop, a site for selling pre-loved fashion, has grown its user base to 18 million since the end of 2019 and ‘experienced record sales’ in the summer, according to the Guardian’s report.
This suggests shoppers are taking a more sustainable and cost-friendly approach to their online shopping behaviours since the coronavirus crisis began, something which could continue past the pandemic as consumers cement their habits.
35% of all UK online purchases during first UK lockdown were made via Amazon
A report from Wunderman Thompson Commerce has revealed that Amazon’s share of the UK ecommerce market rose to 35% during the first lockdown, up from 30% at the end of 2019, highlighting the retailer as one that has benefitted most from the pandemic.
One fifth of the 2000 UK consumers surveyed claimed that their intention to purchase from Amazon after the coronavirus outbreak ends had increased, even though a similar number (21%) said that they were concerned about the company’s growing dominance in the industry.
Sixty-one percent of respondents cited free delivery as a key purchase driver, followed by availability (57%) and price (53%), while the most sought-after change to consumers’ online shopping experience was free returns.
Amazon marketplace sellers thought to have sold an additional $95 billion worth of products in 2020
Marketplace Pulse has estimated Amazon marketplace sellers sold an additional $95 billion worth of products last year than they did in 2019. That’s around $295 billion in total.
Taking its place amongst the winners of the pandemic – which include brands like Walmart, Etsy and Target – Amazon is also predicted to have sold $180 billion worth of products (worldwide) in first-party sales (Amazon Retail), up from $135 billion in 2019 and $117 billion in 2018.
Amazon’s GMV – Gross Merchandise Volume – is thought to have increased by 42% year-on-year in 2020, with its marketplace arm accounting for 62% of its total global GMV (although this equates to just a 2% increase in total share since last year).
March was a particularly notable month for the marketplace as the coronavirus began to overcome multiple regions of the globe. Products sold via the platform accumulated a 46% share of the top 100 most searched queries related to Covid-19 as consumers rushed to buy essentials and safety equipment like PPE and sanitiser. Meanwhile, more than half of new US Amazon sellers joining the marketplace across the month were located in China, an increase of 39% on the same period in 2019.
Amazon sales up 37% year-on-year in Q3 2020
A press release outlining Amazon’s Q3 financials has confirmed that the company’s net sales grew 37% year-on-year worldwide, totaling $96.1 billion for the period and surpassing estimates of $92.7 billion. North American net sales were up by 39%, while international net sales rose by 37%.
Sales of its subscription services grew 33% year-on-year, and Amazon Web Services (AWS) grew by 29%. Total profits were up by 200% to $6.3 billion compared to the same quarter the year before, beating Amazon’s previous record of $5.2 billion profit back in Q2.
While Prime Day, which took place from October 13-14, wasn’t included in these results, the company hailed it as the “two biggest days ever for small and medium businesses in Amazon’s stores”. $3.5 billion in sales were made during this event alone, equating to a 60% uplift compared to 2019’s event. Prime members also saved $1.4 billion on goods across the two days, according to the statement from Amazon.
Looking ahead to Q4, sales are expected to reach between $112-121 billion, or to grow between 28-38% year-on-year, as customers opt to do much of their holiday shopping online.
Ebay’s Q3 revenue rises 25% year-on-year in 2020
Ebay’s Q3 2020 financial statement has revealed that its revenue rose 25% to $2.61 billion compared to the same period in 2019, beating expert estimates of $2.48 billion. In the quarter ending 30th September, the marketplace also reported that its number of annual active buyers increased by 5% to total 183 million globally.
With Amazon’s sales expected to rise further as the year draws to a close, these strong growth figures are in line with an accelerated trend in one-stop-shop online marketplace shopping amid the coronavirus pandemic.
Ebay expects its Q4 2020 earnings to reach up to $2.71 billion, boosted by holiday purchases and has raised its full-year sales outlook to the region of $10.04 to $10.11 billion. This equates to a 19-20% total revenue growth across 2020, where original forecasts predicted a 14-16% growth.
Inditex’s H1 2021 online sales rebound further to beat pre-pandemic levels by 137%
Inditex, owner of well-known fashion retailers Zara, Pull&Bear and Bershka (among others), has published its H1 and Q2 2021 financial results, which show both online and offline sales have rebounded substantially to beat pre-pandemic levels.
Total revenue across all channels for the first half of 2021 reached €11.94 billion, a figure that is up 49% year-on-year, as consumers began shopping for outfits amid steady global reopening. Online sales during this period grew by 36% versus H1 2020, or by 137% compared to the first half of 2019, before the pandemic.
This strong omnichannel performance has been gradually improving throughout the year, with sales between the beginning of August and the beginning of September rising 22% year-on-year – equivalent to a +9% growth on the same month of 2019. While it is expected that in-store sales will see increased revenue now that its stores are back to business as usual, its online channels are still raking in sales. In fact, Inditex’s branded websites and apps are expected to account for more than a quarter of the Group’s revenue for the full year.
This comes as the Group continues to implement its two-year digital transformation plan, which sees €1 billion earmarked for digitisation and a further €1.7 billion dedicated to streamlining an integrated in-store and online platform across its brands.
Lululemon revenue rises 61% year-on-year in Q2 2021
A transcript of the latest financial figures from fitness apparel brand Lululemon shows revenues rose 61% year-on-year in Q2 2021. This increase is thought to have been driven by continued demand for clothing like leggings that are both comfortable for home and practical for workouts, despite the reopening of shops, events and public spaces. Total revenues rose to $1.45 billion from 902.9 million the year before.
This quarterly result smashed experts’ estimates and has brought about a revised upward outlook for earnings across the full year. The company is now predicted to surpass its 2023 revenue target by the end of 2021, thanks in part to the shift to online shopping seen in the past 18 months.
Online sales for the brand rose a further 4% during the three months to June, on top of the 157% increase in Q2 2020, demonstrating it has been able to retain many new digital customers since the peak of the first wave. Given that a hugely successful online warehouse sales event took place in Spring 2020, which was not repeated this year, the brand has done an even better job at maintaining ecommerce momentum.
Since the start of the pandemic, Lululemon has implemented a number of enhancements to its mobile and desktop sites, including the expansion of payment methods, better predictive search and a more seamless checkout process. These have no doubt aided strong online sales performance and customer retention throughout the first half of the year.
Pandemic ecommerce boost sees Shein’s valuation double to £21 billion as it becomes the world’s largest online-only fashion retailer
Chinese-owned, online-only fast fashion retailer Shein has more than doubled its valuation year-on-year thanks to unprecedented growth during the pandemic. In a recent 2021 assessment, Shein has been valued at an equivalent £21 billion, up from £10 billion last year, crowning the brand as the largest online-only fashion retailer in the world.
Present in 220 regional markets, according to reporting from the Retail Gazette, the company has seen a surge of more than 81 million app downloads globally in the first half of 2021 alone. It is becoming increasingly popular in the US, with the app periodically topping the mobile download chart since the onset of the coronavirus. Bloomberg has noted that Shein became the most downloaded shopping app in the US in May – ending Amazon’s 152-consecutive-day streak – calling it a “remarkable feat for any seven-year-old clothing brand”. Since then, the two retailers have been in close competition for the monthly top spot.
While Shein does not officially disclose its revenue, Forbes estimates the company generates more than US$10 billion annually (~£7.3 billion), with sales soaring even further throughout the course of the pandemic.
Zara owner Inditex sees online sales up 67% in Q1 2021
Inditex, owner of fashion brands Zara, Bershka and Pull & Bear, has posted better than expected results for the month of May. In a financial statement, the brand revealed sales were 5% up between May 1st and June 6th 2021 on the same period in pre-pandemic 2019, and up 102% versus the same period in 2020.
Over the first quarter of 2021 (1st February-30th April), online sales improved 67%, which comes as good news for fashion retail sector as many brands recover from record lows last year. Inditex also stated that 84% of its stores were operating as usual by the end of the first quarter, resulting in a 24% loss in trading hours. As of the 6th June, 98% of its stores had reopened following a much wider lifting of coronavirus restrictions in recent weeks.
The gradual reopening of its brick-and-mortar offering, as well as strong online performance, has no doubt had a positive impact on total sales for the group, which have been recorded at €4.9 billion (£4.2 billion) – a 48% rise on Q1 2020, but a decline on Q1 2019 (€5.9 billion).
The group has said that the spring/summer collections across its brands have been well-received by its customers. As lockdowns continue to loosen in some major markets, it would be unsurprising to see online and offline revenue for Inditex, and other omnichannel fashion retailers, begin to pick up pace in the coming months.
Online fashion retail sees 10.9% month-on-month sales growth in March 2021
A year on from the start of the first UK lockdown, March marked the return of (all retail) sales levels higher than pre-pandemic figures for the first time since December, due to a 0.6% month-on-month boost in online retailing prior to restrictions easing.
Data from the ONS indicates ecommerce sales accounted for 34.7% of all retailing for the month, down from 36.2% in February but significantly higher than March 2020 figures where the portion of online sales was measured at less than one-quarter – 23.1%.
Online sales in the fashion and textile category have been picking up notably since the same period last year, with March 2021 seeing 78.2% higher online sales than March 2020. This is 10.9% up on last month, which is a promising sign of pent up demand as summer fast approaches.
Meanwhile, other retail categories saw huge online sales growth compared to March 2020, particularly food stores (up 105%) and household goods stores (up 99.7%), although month-on-month changes since February were relatively minor at +0.2% and -0.7% respectively.
One quarter of shoppers purchased apparel from websites outside of their home country in 2020
Data from eShopWorld shows one quarter of shoppers (surveyed across 11 countries) purchased apparel from websites outside of their home market in 2020, rising to 31% among younger consumers in the Gen Z and Millennial age brackets. This marks apparel as the most sought-after ecommerce product, cross-border.
This is despite the fact that UK online clothing sales over much of the course of last year, with a few exceptions, have been much lower than levels seen before the pandemic. As a result, these figures from eShopWorld highlight the importance of offering and investing in cross-border ecommerce capability for clothing retailers, particularly as they begin recovering post-Covid.
Footwear was the next most popular product, with 15% of shoppers making an international purchase of this category, while children’s clothing came third (14%).
In Singapore, 36% of consumers bought apparel from outside of their home market, making it the top global market for cross-border online clothing purchases in 2020, according to analysis. This was followed by Russia (32%), Chile (31%), France (29%) and Mexico (28%).
So far, total cross-border ecommerce is up 74% year-on-year from data reported in the first four months of 2021, implying that momentum amongst international shoppers is still very high.
Boohoo Group sees 41% year-on-year rise in revenue in Q1 2021
In a full year financial statement ending 28th February 2021, Boohoo Group announced its revenue rose 41% year-on-year to £1.745 billion, beating its revised estimates of 36-38%. International revenue for the Group grew faster than that of its home market over this period, at 44% versus 39% respectively. It also reported a 28% increase in active customers, totalling 18 million.
The past year has seen the Group absorb a number of struggling multichannel fashion retailers including Debenhams, Oasis, Warehouse, Dorothy Perkins, Wallis and Burton, which will undoubtedly help boost its overall performance moving forward. As coronavirus restrictions begin to ease, and consumers return to brick-and-mortar shops, Boohoo says it expects its total revenue growth for the next year ending February 2022 to reach around 25%. This also accounts for additional factors such as a predicted increase in returns following an unusually low return rate at the peak of the Covid-19 crisis.
Thanks to its strong performance, the Group has acquired a third distribution centre, with a fourth expected to begin operation in the second half of the calendar year.
Sales through In The Style’s app increased more than 400% in the year ending 31st March 2021
Online-only fashion retailer In The Style has revealed sales through its mobile app increased more than 400% in the year ending 31st March 2021, making up 55% of its total sales for the period compared to just 19% the year before.
This rapid growth was partly due to a strategy of exclusivity surrounding the app, which allows users early access to its most coveted collections, like recent collaborations with influencers Stacey Solomon and Jac Jossa.
In the company’s quarterly statement, CEO Adam Frisby commented: “Our collaboration model creates a strong customer connection, drives highly efficient customer acquisition marketing metrics, and gives us exposure to a broad range of customers.”
Meanwhile, total revenue grew 130% year-on-year to £44.5 million, and the number of new customers In The Style acquired rose by 19%, following a particularly strong 2020 holiday season. These figures are reflective of the strong performance other online-only fashion brands have experienced since the onset of coronavirus.
UK consumers most likely to buy clothing online than any other product post-pandemic
Despite the poor sales in the clothing and apparel sector (both online and offline) over the last year, UK consumers are more likely to buy clothing through online channels than any other product category post-pandemic. This is according to a spring 2021 report from MiQ.
Appetite for online fashion is, unsurprisingly, highest in 18-25 year olds, with 51% of the cohort stating they were more likely to buy clothing after the coronavirus crisis subsides, compared to 50% of consumers aged 26-35 and 40% of those ages 56-65. Although interest in online fashion falls in correlation with age, all cohorts cited clothing as their top category for online shopping after the pandemic.
Consumers of all age groups also ranked beauty, personal care and consumer electronics as other products they were more likely to purchase online in the future. Meanwhile, a substantial 34% of over 65s stated they aren’t interested in shopping for any of the 8 listed product categories online once life returns to normal. This suggests that new digital shopping behaviours will be less permanent for this age group in the long-term than they will be for their younger counterparts.
The high interest in shopping online for clothing post-pandemic indicates that brick-and-mortar high street retailers in this sector could continue to struggle, even once all restrictions are lifted in physical spaces. Now more than ever, multichannel fashion brands must ensure they create enticing offline experiences to capture footfall.
Boohoo sales up 40% in four months to December 31st
Boohoo’s sales grew by 40% year-on-year in the four months to December 31st 2020, the company has announced in a press release. This follows and includes sales from the Group’s successful relaunch of Oasis and Warehouse as online-only brands after it acquired them earlier in 2020.
During the period, total sales amounted to £660.8 million, £357.2 million of which came from UK consumers. While US sales were lower at £167.7 million (equivalent to US$229 million) over these four months, revenue growth in the region soared even higher at +52% year-on-year.
Thanks to its success last year, where many other fashion retailers have struggled, Boohoo Group has also recently bought the brand and website of former high street giant Debenhams, as well as Dorothy Perkins, Wallis and Burton. Notably, these brands have little in the way of an overlapping demographic with its core brands Boohoo, PrettyLittleThing and Nasty Gal, demonstrating the Group’s strategic ambition to widen its appeal to slightly older consumers.
The retailer says it now expects revenue for the financial year ending 28th February to be 36-38% up year-on-year, a figure significantly higher than its previous estimates of 28-32% growth. However, the company believes Brexit may cause some ‘cost headwind, predominantly from higher distribution and administrative costs’, which could have minor impact on business performance as the year continues.
Up to 70% of John Lewis sales came from its online channels in 2020
Online channels accounted for 60-70% of John Lewis sales over the course of 2020, up from 40% before the pandemic, according to details from the retailer’s report Shop Live Look 2020.
The data reveals mobile and desktop browsing of the brand’s website increased by 55% year-on-year, while tablet traffic declined by a whopping 41%, reflecting wider trends in device popularity across the retail industry.
Evenings remained the most popular time to browse, but online orders were more spread out throughout the day, peaking between 11am and 4pm, whereas they were typically placed between 7pm and 10pm in 2019. Meanwhile, the number of John Lewis purchases destined for home delivery rose a quarter on last year, quadrupling in the case of Waitrose.com orders, and 55% more products were sent to others as gifts.
Some of the most popular items bought by John Lewis customers over the last 12 months included beauty tech (such as electronic facial devices) – up 178% – chess sets (up 121%) and nostalgic toys, like Scalextric kits (up 100%).
However, sales of products such as suitcases, high heels and clutches and ‘party handbags’ all saw dramatic declines of 69%, 62% and 56% respectively thanks to customers’ dramatic lifestyle changes brought on by the pandemic.
Next online sales up 36% year-on-year over Christmas period 2020
Online sales for the UK fashion and department store Next were up by 36% year-on-year over the nine weeks to 26th December 2020, it announced in January. As a result, total full-price sales were just 1.1% down on the same period in 2019, as online sales compensated for profit lost from closed brick-and-mortar stores.
The week commencing 6th December saw the consumers purchase the most via Next’s online channels, reaching nearly £80 million in total value, before dropping off slightly the week after, suggesting that much of the public opted to get their Christmas shopping done earlier than usual (as predicted).
Childrenswear, loungewear, sportswear and home were the top performing online categories over the festive period, while workwear and occasionwear were, naturally, the least popular among Next customers. The company also reported returns rates were much lower than usual at 21% compared to 35% during the same nine weeks of 2019.
Next says it predicts full-price product sales to decline by 14% over January in the midst of another national lockdown. However, it has adjusted its forecast pre-tax profit from £365 million (estimated in October) to £370 million for the full year.
M&S online clothing and homeware sales grew by 47.5% in Golden Quarter
In a trading statement, Marks & Spencer has revealed that, despite like-for-like sales falling 7.6% over the ‘Golden Quarter’, online clothing and homeware sales grew by 47.5% year-on-year to £353 million. This figure rose to 62.2% for the month of November 2020 during the second national lockdown, before dropping off a little in December to 47%.
The press release indicated that these sales were ‘heavily biased’ towards sleepwear and leisurewear thanks to Covid-19 having a continued impact on consumers’ lifestyles. Overall, full-price sales of clothing and homeware for the brand declined by a modest 4.8%, while online sales doubled in comparison to the same period the year before.
Online-only fashion retailer In The Style sees 169% increase in sales in Q4 2020
The Retail Gazette reports a 169% increase in sales for online-only fast fashion retailer In The Style in the 13 weeks to 31st December 2020. Total sales for the quarter were £13.5 million, while sales through its dedicated mobile app rose by more than 500%, according to its data. In fact, in-app sales accounted for more than half of all sales for the brand over this period.
It wasn’t just sales that saw a huge boost for In The Style over the 2020 holiday season. The number of first-time customers increased by 45%, while a 50% improvement in conversion rate was also recorded and order volumes grew by 95%.
The brand has seen a continued healthy performance since the coronavirus crisis began, and its particularly strong Christmas trading could indicate even bigger sales results on the horizon for its more well-known competitors like Boohoo Plc.
61% of fashion retailers say they are planning to reduce the number of SKUs in their inventories
The pandemic’s impact on the fashion industry, particularly in store, has led to significant amount of left over stock and periods of heavy discounting by retailers as they try to shift it, greatly affecting overall revenue. A December 2020 report from Business of Fashion and McKinsey observes the ways fashion retailers are making fundamental changes to their strategies going into 2021 to resolve the issues that have been brought to light more plainly than ever before.
When asked what strategies they would employ to avoid future overstock, 61% of fashion retailers said they were planning to reduce the number of SKUs in their inventories. A further 60% hope to improve analytics for consumer insights so that they can better predict demand, while 55% said they would implement a more agile supply chain.
Combined with other methods such as moving to a seasonless assortment and reducing the number of collections they produce, these retailers hope to make their business operations more cost effective and environmentally friendly moving forward.
ASOS UK sales up 18% year-on-year to August 31st 2020
ASOS UK sales have risen by 18% year-on-year to £1.18bn, according to the brand’s full year financial statement ending August 31st 2020. International retail markets, which include the European, US and ROW regions, performed even higher at +20% during the same period.
The statement also revealed that the company has seen a 3.1 million rise in its active customer base, which now totals 23.4 million across the world, reflecting increased brand engagement spurred on by the pandemic.
This news comes despite issues with the retailer’s supply chain when Covid-19 first hit, as well as huge volatility in sales across the fashion sector throughout the spring when lockdowns were enforced on much of the Western world. The brand also said it continues to remain cautious about the financial impact the crisis is having on its core 20-something customer base, which could affect sales and basket sizes over the festive period and in the longer term.
Nick Beighton, ASOS CEO, added to the statement: “I am pleased by the improvements we have made this year but there is still more for us to do to continue our progress. Whilst life for our 20-something customers is unlikely to return to normal for quite some time, ASOS will continue to engage, respond and adapt as one of the few truly global leaders in online fashion retail.”
International online sales of luxury goods increased by 170% year-on-year in August and September 2020
International online sales of luxury goods increased by 170% year-on-year in August and September 2020, according to analysis from eShopWorld.
As retail begins its slow recovery on a global scale, the cross-border luxury market appears to be faring well following sales performance in July 2020 that was 40% above those seen in the lead up to Christmas 2019 (a period which is usually the strongest in the calendar alongside new year discounts).
Luxury has been one of the most hard-hit sectors of the industry as consumers rein in their spending and focus on essential items throughout the pandemic. The closure of physical stores, as well as shoppers’ reluctance to splash out and other unpredictable online behaviours has caused experts to predict drops of 40-60% in experiential luxury and 25%-45% in personal luxury sales year-on-year.
Despite this gloomy outlook, the late summer growth figures indicate that brands are altering their marketing strategies to prioritise digital, thereby bringing luxury online experiences to those outside of their usual domestic markets. CEO of eShopWorld, Tommy Kelly, explained, “In the current climate, there is incredible opportunity for luxury beyond the traditional channels and markets, particularly as older shoppers have become more comfortable with online, while digital natives are, of course, already there.”
56% of global consumers are more influenced by images on social media when making purchases post-pandemic
Imagery and videos on social media have more influence on consumers’ purchase intent than they did before the pandemic, according to a Q3 2021 report from Stackla. In a survey conducted of more than 2000 online shoppers from the US, UK and Australia, 56% of respondents said they are comparatively more swayed by images and videos on social media when making ecommerce purchases.
There is no doubt that the increased hours spent on social media has helped boost social content as a key marketing format that drives conversion. Indeed, nearly three-quarters admitted to spending a larger amount of their free time on social apps since the pandemic began, as has their frequency of online shopping.
It seems as though shoppers have also become more particular about the kind of social content they’d like to see when deciding to buy a product. Seventy-nine percent of survey respondents said UGC now highly impacts their purchasing decisions, compared to just 9% who said they were most impacted by influencers.
This highlights the increased importance of authenticity and real-life reviews amongst potential customers, favouring content produced by fellow customers, rather than sponsored key opinion leaders. In fact, 66% said they had been inspired to purchase from a new brand after seeing social media images of that brand from other consumers. A further 88% cited authenticity as a core factor when choosing which brands they were likely to support moving forward post-pandemic.
54% of global shoppers find browsing for new products more enjoyable online than in-store
As consumers become more and more accustomed to making online purchases, fifty-four percent of global shoppers now prefer online window shopping to browsing instore, according to April 2021 research from Bazaarvoice. The study, conducted on more than 8000 consumers worldwide, has found that they not only enjoy browsing for items online, but also find it less of a hassle.
Indeed, data shows that almost two-thirds (64%) of those surveyed found browsing online easier than doing so inside a brick-and-mortar store, while a further 61% said they discovered new items more frequently online than in store. Analysis of responses revealed the top three reasons for better product discovery online were convenience (55%), greater choice (46%) and the ability to research items and any corresponding reviews (45%).
The report suggests most of this online product discovery is happening on mobile devices. Forty-six percent of consumers claimed they spend their time window shopping on mobile, versus 26% on desktop and 10% on tablet.
However, it seems consumers are significantly more likely to make an impulse purchase, as well as spend big, in store than they are when online shopping.
As in store retailing ramps up, these findings sound a clear warning for retailers with high street presences, particularly when it comes to ease of browsing and product discovery in store.
Volume of online chat with UK brands has risen to its highest since the pandemic began
HubSpot’s Industry Benchmark Data has found that, as of March 2021, online chat interactions with brands have risen to their highest since the pandemic began.
Results show total conversation interactions across more than 103,000 of HubSpot’s brand customer base are 23% higher than the January 2020 benchmark, even higher than during the 2020 golden quarter (up 15% on January 2020). This suggests that, more than ever, UK consumers prefer an on-demand interaction experience and companies should prioritise this demand in order to communicate with their customers.
Website traffic also reached its peak in March. Total visitors to brand websites increased by 64% vs January last year and 40% on December 2020. Meanwhile, fifty-six percent of all marketing emails were opened in March, recording the highest open rate since the start of the pandemic. This equates to a 28% increase in open rates since December 2020.
These figures combined paint a positive picture for UK marketers as they navigate ways in which they can engage more with their customers during these unprecedented times. New methods of communicating with shoppers appear to be becoming more effective as email open rates and online traffic increases, although the rise in chat interactions could indicate that there is more brands can do to improve on customer experience.
Buy now pay later firms see a rise in interest over coronavirus
Several buy-now-pay-later firms have confirmed they have seen a rise in interest and usage of their services, particularly in the US, since the onset of the coronavirus pandemic, Reuters reports.
Afterpay, a service based in Australia, told Reuters that it had seen the number of active users from the US more than double, reaching 6.5 million by the fiscal year end June 2020, while its sales in the region saw threefold year-on-year growth throughout Q3 2020. More than half of its US customers are between 25 and 40 years old, the report reveals. A similar company, Affirm, based in San Francisco, also claimed its revenue rose 93% to $509.5 million for the year ending 30th June 2020.
It is perhaps unsurprising, in such a volatile year for the economy, and with job security uncertain, that consumers are turning to buy-now-pay-later services to help spread the cost of their online purchases. However, data suggests they are becoming increasingly unlikely to meet repayment deadlines.
In a study conducted by Credit Karma for Reuters of 1038 US consumers, almost 40% of those that have spread their payments online have missed more than one payment, and as a result 72% have had their credit score lowered. More notably, 42% of respondents have said they had used a buy-now-pay-later plan before, indicating interest in the service is becoming more and more prevalent among Millennial consumers.
Over 70% of D2C brands have, or will, integrate subscriptions into their ecommerce strategies
Data released in Bold Commerce’s Subscription Trends 2021 report indicates that over 70% of D2C brands have – or will soon – integrate subscriptions into their ecommerce strategies. Furthermore, over half (54%) of respondents claim subscriptions account for 20% or more of their overall sales.
Subscription-based retailing is a proven way to improve loyalty and customer lifetime value – both of which have been badly affected by new shopping behaviours necessitated by the virus. Indeed, fifty-seven percent of brands that have implemented such loyalty programmes have measured their customer lifetime value at a year or more, while just 35% of those without said the same.
Twenty percent of retailers that have so far included discounts as a way of incentivising the purchase of subscriptions have reported month-on-month growth of over 50%. Meanwhile, one-quarter of brands that offer additional benefits as part of a subscription package, such as free shipping or early access to new collections, are seeing the same level of growth compared to 1 in 10 brands that don’t. This suggests brands need to think about more than just discounting if they want consumers to take out a subscription, as other perks appear more influential on overall uptake.
At the moment, industries that are seeing the highest growth (25% or more month-on-month) in subscription services are not all what you might expect. Sporting goods ranked first according to the survey, with 69% of brands in this category citing this level of growth, followed by the Industrial/B2B (60%) and Automotive (57%) sectors. Other up-and-coming industries with modest monthly subscriptions growth of 10% or more include food and beverage, technology and fashion.
More than two-thirds of European consumers have expressed interest in ‘shoppertainment’
Following China’s ecommerce success in this area, more than two-thirds of European consumers have expressed an interest in ‘shoppertainment’ – i.e. online shopping via livestreaming, interactive games and video content – according to a 2021 Forrester and AliExpress report.
Shoppertainment has proven to be beneficial for consumer engagement and sales (particularly impulse buys) and has been accelerated by the boom in online shopping over the past year. Previous research from Forrester forecasted a 45.7% compound annual growth rate in shoppertainment in China alone by 2023, but the pandemic has shifted the goalposts and made it more likely that this will be achieved much sooner.
Now regions in the west have begun experimenting with the idea of shoppertainment, and European consumers are especially excited for the future of this concept, particularly those in the 18-34 age category. Twenty-eight and twenty-seven percent, respectively, believe they will be able to take advantage of cheaper deals and a wider product offering by participating in shoppertainment, although one in five did admit they were concerned about the quality of the products featured in these initiatives.
Electronics, fashion and cosmetics are some of the biggest product categories that consumers are most interested in exploring through shoppertainment, especially through livestreaming. They have also expressed their desire to be able to shop practically and quickly through these sorts of channels, aside from being entertained. Features such as the ability to place orders, get vouchers, see estimated delivery times and read returns policies were the most popular with survey respondents, as was content that was 10 minutes or less in length.
47% of British consumers have had issues with parcel delivery since the onset of coronavirus
An October survey of more than 2000 British consumers, commissioned by Citizens Advice, has found that nearly half (47%) of British consumers have had issues with the delivery of parcels since the first lockdown began in March 2020.
With the UK having been in full or partial lockdown for much of this year, 51% say they feel more reliant on having products delivered to their homes. The increased numbers of people now shopping online, whether for necessity or convenience, seems to have thrown retailers’ logistical issues into the spotlight.
Of all respondents, a whopping 96% claimed to have ordered products that require parcel delivery since March. Three in 10 of these have experienced shipping delays, making it the biggest issue cited by consumers. A further 18% said they had lost out financially due to a home delivery gone wrong or missing, with 40% of those losing out by more than £20.
As a result, nearly one in four have lost confidence when ordering goods from online stores – something that could have a larger impact as people begin their Christmas shopping.
Citizens Advice has said views of its webpage providing advice on parcel issues had more than doubled to 208,000 between March and October this year compared to just 94,000 over the same period last year.
US shopping app downloads slow to a 4% year-on-year growth in Q3 2020 after a Q2 spike
US shopping app downloads slowed to a 4% year-on-year growth in Q3 2020, following a spike in Q2, according to Sensor Tower’s Mobile Retail Trends Analysis, published in Q4.
Across the Apple App Store and Google Play, shopping app downloads in the region surpassed 150 million. The ranking of most downloaded apps remained mostly unchanged throughout Q1-Q3 in 2020, with Amazon, Wish and Walmart remaining in the top three, in that order, as they did last year. However, three new retail apps entered among the remaining seven spots, mirroring their successes in the US market this year – Shop (by Shopify) rocketed to fourth place overall, while fashion retailer SHEIN ranked number seven and Nike crept in at number 10.
Sensor Tower data also revealed that US app download growth for top brick-and-mortar retailers between Q1-Q3 this year was almost double that of top online-only retail apps (+27% vs. +14%). Downloads for stores that also have a brick-and-mortar presence also dropped off less sharply over the Q3 period compared to those of online-only retailers.
This suggests US consumers found a new way to shop with their favourite high street stores this year under unprecedented circumstances. Customers who favour flexible shipping policies and contact-free pickup particularly reaped the benefits of apps from these kinds of retailers.
Cross-border ecommerce in Singapore booms in year to June 2021
A study released by YouTrip, shared by WARC, has found cross-border ecommerce in Singapore has boomed under the conditions of the Covid-19 pandemic, rising 84% year-on-year in the 12 months to June 2021. Cross-border purchasing is quickly taking a larger share of the ecommerce market in the country, which is expected to reach $8 billion by 2025.
Many of the most popular websites driving heightened amounts of cross-border commerce originate from either China or the US. Taobao took the top spot for the year, with transactions via the site rising by 131%, followed by Amazon at number two. Alibaba placed third (with transactions up 120%), while eBay also made it into the top five (up 98%). June and November/December were reported as peak cross-border shopping periods for Singaporean consumers, reflecting prevalent seasonal sales promotions and events like Prime Day and Singles Day.
According to 8 in 10 consumers in the region, the main reason for shopping with overseas retailers was the lower cost of products compared to those promoted by native retailers. It appears to be a much more pressing reason for shopping in this way, data suggests, than the prolonged closure of international borders. In fact, 9 in 10 plan to continue with their cross-border purchase habits even once overseas travel reopens post-pandemic.
Singaporeans’ demand for bicycles drove the sharpest growth on cross-border websites over the year-long period, as did purchases of various K-Pop merchandise, which saw double and triple the number of sales respectively.
JD.com sees annual active customer accounts rise 27.4% in year ending June 2021
Chinese retail giant JD.com has experienced a 27.4% rise in annual active customer accounts in the year ending June 2021 to almost 532 million, due to an increased appetite for online shopping. These accounts are defined as unique customers that have shopped at least once with JD across the 12-month period, either via online retail or its online marketplace.
In Q2 2021, the company also reported a 26% year-on-year overall rise in net revenue to RMB 253.8 billion (£28.5 billion), beating experts’ predictions. Revenue from its Product segment, which includes JD’s ecommerce arm, rose 23%.
The brand’s popular 618 Grand Promotion, which spans 18 days in June and whose popularity is second only to rival Alibaba’s annual Singles Day event in November, helped accumulate additional online revenue, as well as 32 million new users on its platform during the quarter. Its grocery category drove many of these promotional transactions, with JD Fresh seeing a 70% year-on-year boost in sales within the first hour of the event, while alcohol sales exceeded RMB 200 million (£22.4 million) within the first five minutes.
The maternal and baby, pet, and luxury categories also performed strongly, demonstrating continued momentum across several verticals despite the return to a new normal. However, there were other unspecified categories that JD.com admits had previously ‘peaked during Covid-19’.
China’s emerging night-time shopping habits revealed by JD.com
Big data compiled by one of China’s largest ecommerce players, JD.com, has found emerging night-time shopping habits among Chinese consumers over the past year.
Analysis shows online sales conducted from 8pm-11pm local time between May 1st and July 1st 2021 grew more than 100% year-on-year, as shoppers increasingly choose their evening hours to browse products online. The trend is largely driven by the healthcare industry, which saw sales of medicine quintuple and sales of fitness equipment triple during throughout this time of day. This suggests home workouts are here to stay for many, despite recent widespread reopening.
Other product categories that saw a spike during these evening hours were alcohol, skincare and beauty and pet services, all of which also experienced a 100% increase in sales versus the same period of 2020. Meanwhile, purchases of digital products out on top by rising 500% year-on-year, with 8pm-11pm accounting for more than half of transactions for this vertical across that take place across a whole day.
According to the data, the over-85s and white-collar workers make up the bulk of consumers shopping online in China during the late evening hours. Typically, these cohorts have higher-than-average disposable income and are ‘playing an active role in the night-time economy’, far more so than students and residents in smaller towns do, JD says.
Cross-border ecommerce in China rose 46.5% in Q1 2021
According to a report published by Wunderman Thompson and JingDaily, ‘Transcendent Retail: APAC’, cross-border ecommerce in China rose 46.5% year-on-year in Q1 2021, reaching an equivalent value of $63.8bn.
The report claims that, overall, up to 52% of China’s retail sales will occur online throughout the course of 2021 ($2.8tn in transactions), versus a 29% share in South Korea and just a 15% share in the US. Much of this will be driven by cross-border sales of goods such as international luxury brands, for which Chinese consumers have the largest appetite compared to other regions of the world.
Given the huge growth of cross-border online shopping in China during Q1 alone, sales across the vertical now equate to 14.5% of all ecommerce sales in the country, data suggests. As the year continues, this will no doubt gain even more momentum, further increasing its share.
The pandemic has spurred on this trend in a number of ways. By December 2020, as many as 70% of China’s population – around 989 million people – were online, the majority via their mobile devices. Nearly 80% of this cohort were shopping online at this time, while 86% were actively using mobile payments. Add to this the restrictions on travel, Chinese consumers and tourists found it more difficult than ever before to make in-person purchases of international goods and have therefore turned to cross-border online retailers to do so.
In an overview, the report explained, “China’s dominance of global ecommerce is no accident. It came about because of a specific set of planned circumstances: the rollout of fast-speed mobile networks even to rural communities, the building of logistics networks including warehousing and delivery; and the near total adoption of mobile payments across China in recent years.”
Pinduoduo’s MAUs increase by 74.6 million quarter-on-quarter in Q3 2020
Chinese ecommerce platform Pinduoduo increased its monthly active users (MAUs) by 74.6 million in Q3 2020 compared to the previous quarter, to a total of 643.4 million. Its number of annual active buyers also rose by 36% to 731.3 million compared to the same period in 2019. At just five years old, this makes Pinduoduo the fastest ecommerce company to have surpassed 700 million active buyers.
Gross merchandise value (GMV) reached a whopping 1.5 trillion yuan (+73%), while its revenue climbed 89% year-on-year to 14.2 billion yuan ($2.1 billion US) as Chinese consumers continued to favour online shopping after its peak of the outbreak in the region. A twenty percentage point decrease in sales and marketing expenses helped to boost this figure further.
This success follows innovative action taken by the company to extend its offering to consumers. In August, Pinduoduo launched its grocery delivery service Duo Duo Maicai to meet growing demand amidst the fallout from the pandemic.
China’s annual luxury online penetration increased from 13% in 2019 to 23% in 2020
A post-Covid boom in China’s luxury market could result in 48% growth by the end of 2020, according to a report from Bain. If the results reflect this, total luxury sales for the year could reach 346 billion RMB, and as growth continues, mainland China is likely to have the largest share in the luxury market sales by 2025.
Much of this growth has been spurred on by younger consumers in the Millennial and Gen Z cohorts, who are much more likely to use the internet to research and purchase luxury goods than their more mature counterparts. Gen Z is the only generation to cite online sources for all three of their top three favourite places to research luxury fashion. China’s annual luxury online penetration increased by a total 10 percentage points between 2019 and 2020 alone to 23%, driven by these changes in shopping habits.
As of October 2020, luxury beauty ecommerce sales had grown by 60% alone since the same month the year before, making a particularly popular luxury vertical amongst Chinese consumers. More impressively, luxury fashion and lifestyle ecommerce sales in China saw an equivalent increase of 100%, although this started at a relatively small base in 2019 due to overseas purchases having been preferred up until this point.
Ecommerce penetration is still quite low for luxury fashion and lifestyle in China– it’s predicted to grow from 5% in 2019 to 7% in 2020 – whereas penetration in luxury beauty far outstrips any other category (expected growth 28% in 2019 to 38% in 2020).
Bain believes online luxury retail has changed permanently since the onset of the coronavirus pandemic, with most brands predicting online penetration of the sector in China to reach anywhere between 20%-25% within the next three years.
Third party sellers on Amazon saw a 60% growth year-on-year in Black Friday weekend sales
In a blog post on 1st December, Amazon revealed that sales performance on Black Friday weekend, which includes Cyber Monday, helped the 2020 holiday season become the ‘biggest yet’ for the company.
Black Friday promotions saw third-party sellers grow their sales by 60% year-on-year, surpassing $4.8 billion worldwide. Amazon also claimed that more than 71,000 small and medium sized businesses (SMEs) selling through the marketplace had made more than $100,000 during the holiday season at the time of publication.
Meanwhile, SMEs based in the US have seen an average of 9,500 products sold via Amazon every minute since October. Record sales levels have enabled independent businesses using the platform to create an estimated 2.2 million new jobs around the globe.
Best-sellers in the US so far since the 15th October (the beginning of the company’s Holiday Dash deals event) have included several Amazon branded items including the Echo Dot and Amazon Smart Plug. Ancestry and DNA services like 23andMe have also been popular with shoppers, as has Barack Obama’s latest book ‘A Promised Land’.
Self-care, toys and pets were among the biggest trending categories in the region as people began searching for gifts earlier than usual. Skincare, pyjamas and LEGO kits also shared the spotlight with consumers preparing for more time indoors in the lead up to Christmas. The company also reported more customers signing up for its Amazon Pharmacy service as a convenient way of receiving their prescriptions.
UK retailers see a 23% increase in online store sales on Black Friday, YoY
Analysis from Nosto has found UK sales in online stores soared 23% on Black Friday 2020. This was accompanied by a 35% rise in online store visits and a 2% increase in conversion rates compared to numbers from the same event in 2019. However, there was a 4% decline in average order value, likely due to heavier discounting than usual to get consumers to part with their cash amid financial uncertainty.
Globally, pet supplies and home and garden came out on top compared to other verticals, seeing a 60% and 52% increase in online sales respectively. The majority of the remaining categories analysed saw growth compared to last year’s Black Friday results, except for fashion and accessories, which experienced a 4% decline despite a 7% uplift in traffic. This category also saw a 5% decrease in conversion rate and a 3% drop in average order value.
Overall, global online consumer behaviour changed quite significantly over the Black Friday Cyber Monday weekend. In 2020, there was a 24% increase in the number of pages viewed and a 20% increase in the time spent on any one page. Meanwhile, bounce rate dropped by 2%, suggesting that shoppers, more than ever, are making more purposeful and considered purchases during the event.
Interestingly, there was also a 30% uplift in the number of product recommendations shown, indicating that retailers have put in place additional measures to ensure a personalised experience for visitors and a greater chance of conversion and/or upselling.
Alibaba’s Singles Day sales event breaks records
November 11th 2020 saw Alibaba pull in record sales during one of the largest retail events in China – Singles Day. Purchases made in the 11-day campaign period covering the unofficial holiday topped $74 billion, a new high for the company and a 26% increase on 2019’s event.
In its press release, the ecommerce giant said that more than 470 brands using Alibaba made 100 million yuan in gross merchandise value (GMV) as a result of the shopping festival. The platform also claimed it had processed 583,000 purchases per second during the peak of activity across the campaign. Of the quarter of a million brands that participated, 31,000 originated from outside of the Chinese market. 2,600 of these were joining the event for the first time.
Digital tools came into their own during the Singles Day event this year. According to Alibaba’s data, its AI customer chatbot dealt with 2.1 billion questions, and more than 30 livestreaming channels on Taobao Live (Alibaba Group’s livestreaming tool) made over 100 million yuan in GMV.
Rival JD.com made 271 billion yuan (US $40.9 billion) in sales throughout the holiday, while major omnichannel retailer Suning.com exceeded 5 billion yuan (US $756 million) in omnichannel GMV across its ecommerce platform, Tmall shop, and livestreaming outlets 19 minutes after midnight on November 11th, the South China Morning Post reported.
With Black Friday just around the corner, the significant growth in purchase activity during China’s biggest shopping event of the year could indicate what is to come for online retailers this festive season, particularly for those with outstanding digital capability.
For more on ecommerce, you can explore the following Econsultancy resources: