One Year On – How has COVID Changed E-Commerce?

This time last year, the UK was still getting used to lockdown. Our retail experience had disappeared down into the once-a-week trip to the supermarket, queuing to get in, shopping alone and fearful of infection.  One year on and things are looking more positive. As retail opens back up, Forms Plus have had a look back over a year that has changed e-commerce for ever. 

For many shoppers, just a few days into lockdown, the realisation that online shopping was an option had not quite kicked in. It took a while to understand that we may choose to shop online for things such as toilet paper, plants or paint – as well as the small part of our shopping we were used to doing via the internet.  March and April 2020 saw growth in online sales of food and drink, health and beauty, clothing and accessories.  Later on sales of fitness gear soared, home office equipment saw a big boost and parents stocked up on toys and games to entertain and educate their children.  As the year went on, DIY supplies, kitchenware and electronics also boomed. 

E Commerce Delivery During COVID

From the start, for retailers, the challenge was how to turn customer footfall into online growth. Whilst major online retailers such as Amazon and ASOS had the infrastructure in place for the sudden surge in e-commerce, for smaller retailers, both the technology and the logistics of coping with much greater volumes of online sales posed a challenge. Bricks and mortar sellers needed to get online fast, and Shopify was a key platform (and beneficiary) for that sudden growth.  New online tools popped up all over, including Click and Collect options for stores and restaurants, and totally new websites appeared such as Bookshop, which helps independent booksellers sell online.

E-commerce sellers also faced difficulties with warehousing, stock availability and meeting delivery promises.  As online shopping grew more competitive, benefits such as free delivery and no quibble returns became increasingly important to shoppers.  Handling returns, with enhanced hygiene protocols to protect those handling items coming back, was an additional challenge for sellers.

For companies who were able to meet customer needs, the efforts paid off.  Customer loyalty faltered, with shoppers happy to try out any brand that had stock availability and could provide fast, free shipping.  Traditionally, the growth of an e-commerce brand could be expected to be around 15% year on year.  Looking at February 2021 compared to 2020, according to the Drum many online sellers grew 40-50%.

The COVID E-Commerce Boom in Statistics

  • Feb 2020 – Internet Sales made up 19% of Total Retail Sales.  By Feb 2021 that figure was 34.5% (ONS)
  • Shopify’s Q4 revenue in 2020 was 94% up year-on-year!
  • Furlough in the retail and wholesale sector peaked with 1.85 million employees furloughed in April 2020, and by the end of January 2021 was at around 935,500 employees furloughed. (HMRC)
  • In the US, e-commerce penetration grew by 10 years in a 90-day period in 2020 according to data from McKinsey
  • UK Online Sales grew 74% year-on-year from January 2020 to 2021 (IMRG CapGemini)
  • 32% of customers plan to stick to their new online shopping habits -(Retail Economics and NatWest)
  • The giants of retail were the biggest winners and losers.  Amazon reported a 51% increase in UK Sales in 2020 and Primark lost around £650m by not being online.
Retail Opening Up

All the signs show that post lockdown, e-commerce is still predicted to grow.  Retail Economics analysts predict that 53% of UK Retail will be online by 2028.  Part of this growth is simply because so many people have discovered the time-saving convenience of online shopping and are likely to continue with their lockdown habits.  Others remain fearful of infection in crowded streets or are uncomfortable with queues and social distancing protocols. 

Social Distancing

Research shows that older, more affluent customers are particularly sure that they will continue to stick with online shopping.  If you have the right items in stock, and offer free, fast shipping and easy returns, customers are happy to continue shopping online and to branch out and discover new brands – so the market is there for the taking.

Many of course will continue to enjoy the benefits of both online and in-store retail. We have all missed touching and seeing products and the joy of browsing in person. The queues as stores opened up make it clear that the High Street is far from over.

If you need any help with forms, labels or packaging for your e-commerce business, do get in touch.  We look forward to helping you navigate this next phase.

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