Multichannel retailers lead the way as online sales growth hits 13-year high

Online sales in December 2020 grew by 37% year on year, pushing sales growth for the year to a 13-year high and it was multichannel rather than pure-play retailers who fared best.

Latest figures from the IMRG Capgemini Retail Index, which monitors the online sales performance of 200 retailers, showed that online sales for the whole of 2020 grew by a record 36%.

IMRG also revealed that, for the first time since 2017, multichannel retailers performed “significantly better” than their pure-play, online-only counterparts, with growth of 57% against 9.1 for pure-play operators.

Standout categories for sales were electricals and garden, with the former spurred on by the pent-up demand that swept the country after the first lockdown.

Online sales for electricals did particularly well in December 2020 and were up by 116% year on year, only outperformed by garden products, which were up 165%. For the whole year, sales of electricals online were up by 90.8%.

In November 2020, sales grew by 39% year on year, bolstered by the Black Friday sales period.

Commenting on the figures, Capgemini managing consultant for retail insight Lucy Gibbs said: “Retail in 2020 has been fundamentally shaped by the pandemic, which caused disruption to consumer demand norms and a shift in focus to digital channels, reflected in the strongest online year-on-year growth in 13 years.  December sales closed the year with continued double-digit growth, up 37%, amid mixed lockdown tiers across the UK. Throughout the year, multichannel retailers have driven a large amount of this growth due to the transfer of demand to online, up 57%.

“Interestingly, pure online retailers ended the year at +9.1% for 2020, compared with 9.8% last year, though the story remains split by the sector demand shift away from clothing and increasing in electricals, home and garden.  We have also seen smaller retailers outperform the larger ones, perhaps due to the ability to be more agile in response to the changes.
“Learnings from 2020 will be crucial as we navigate the uncertainties this year and a sense of a new baseline will take a while to be established. 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.”

IMRG strategy and insight director Andy Mulcahy said of the prospects for 2021: “In 2020 things changed rapidly, and it makes predicting 2021 extremely difficult. 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.

“While growth in Q1 will probably look similar to previous lockdown rates, from April in 2020, those rates were extremely high and will be hard to build upon. If a category was up +120% one month in 2020, recording a drop of 20% for that same month in 2021 might actually be considered a reasonable result.”

Home > News > Multichannel retailers lead the way as online sales growth hits 13-year high