Despite clocking up the lowest growth rate in 21 years in December, online sales for 2021 rose by 39% compared with 2019.
The latest IMRG Capgemini Online Retail Index said that “the impact of the pandemic makes understanding 2021 complex”, but its figures showed that online revenue for 2021 finished 2.7% up year on year against 2020 and up 39% when indexed against 2019.
IMRG Capgemini pointed out that following the huge growth experienced in online sales in 2020, when lockdowns pushed online retail revenue up by 35%, the very high comparison meant that most of the growth in 2021 was negative.Three- and six-monthly averages for 2021 were down by 13% and 11% respectively, while the first quarter of 2021 was up 60%, with the subsequent three quarters down 9% collectively.
The researcher said that while that made the performance of the online retail market seem poor, indexing against 2019 saw the overall market up by 39%. Electricals were down 14% in December and grew only 3% in 2021 as a whole compared with the year before. But compared with 2019, growth was actually 100%.
IMRG strategy and insight director Andy Mulcahy said: “2020 was the most disruptive year that most people in business today have ever experienced. 2021 started out much the same, but as the year unfolded some sense of normality returned, although all these sudden shifts, jolts and lockdowns made understanding what was actually going on very difficult; the 2019 comparisons are testament to that.”
He added: “Online has been a major beneficiary of the pandemic, no question about that, and many retailers have seen their online revenues hit heights they never could have imagined two years ago. But 2022 looks set to be a year defined by inflation, the cost of living crisis and a general increase in the costs of doing business. The competition is more intense now, so gaining and keeping hold of customers against that challenging backdrop is going to require a lot of focus.”
At Capgemini, Lucy Gibbs, senior manager and retail lead for analytics and AI, commented: “Despite the low year on year growth vs last year, 2021 has been another record year for online when compared with pre-pandemic sales. The turbulence of the past two years has left its mark through the acceleration of online growth but also exposed areas of weaknesses for retailers, driving the need for operational resilience and agility. For the first quarter next year we are likely to continue to see negative growth in the year-on-year comparison as we go through a full cycle since the first UK lockdown. However, while nothing is certain, 2022 will hopefully see a more stable period of trading, albeit against a challenging economic outlook.”
She concluded: “In 2021, we saw basket values grow significantly throughout the first half of the year where spend continued to be diverted from usual spending patterns, however dropped away in the second half as travel opened up. It will be interesting to see which of the recent spending behaviours will revert quickly as the competition for share of spend increases, and others that will stick; increased presence of digital experiences, delivery convenience, flexibility of working in different locations will all influence how future of retail will look.”