UK online retailers end 2020 on a high as Covid reshapes sector

UK online sales growth came in at +37% year on year for December, driving the annual figure to a 13 year high, according to research from IMRG and Capgemini.

The coronavirus outbreak sparked high street closures and massive restrictions on the consumer way of life, explaining why the full year growth figure of +36% (YoY) significantly outperformed the start of year prediction of +7.8% (YoY).

A notable trend in December was the widening of the gap between omnichannel and online only retailer performance – with the two groups recording figures of (+52.4%) and (+11.4%) respectively.

The yearly results echoed this pattern, showing overall sales growth of +57% vs. +9.1%.

2021

Andy Mulcahy, Strategy and Insight Director, IMRG, says that predicting 2021 will be extremely difficult as the coronavirus pandemic continues to loom large.

“We could end up with a year where significant pandemic disruption lasts for the first quarter, the first half, or most of the year; shopper spend might divert strongly to experiences and holidays if things open up again; the economic situation might lead to a squeeze on spend; the list of potential macro variables goes on,” he comments.

“As it is so uncertain, some datasets are going to look odd this year and we think putting a forecast out would not be useful. This might be a year where we have to adjust our understanding of what good looks like,” he concludes.

Lucy Gibbs, Managing Consultant - Retail Insight, Capgemini, comments: “Retailers best set to ride out the storm are those with a strong online presence and the ability to remain nimble, using demand sensing to react to the changing landscape and adapt to surges both in-store and online, combined with a readiness to take on opportunities as they come in 2021.”