As Lockdown 2.0 enters its second week, its impact on retail is starting to be felt, with some interesting trends emerging.
We have already seen a rise in use of mobile and social, as well as more consumers using video to shop than ever before. But that is just the start of it. Here is a round-up of what else has been happening.
Online sales accelerate
Just as the growth rate began to normalise throughout September and the beginning of October, online retail sales have spiked once more, according to the latest IMRG Capgemini Online Retail Index, which tracks the online sales performance of over 200 retailers.
As rumours of a second lockdown began to gain strength, the growth in spend between the third and fourth weeks of October soared past the 2019 figures (1.3% and 4.8% YoY), surging from +32.7% (YoY) to +43.4% (YoY) respectively.
At a category level, this pattern was echoed in clothing sales, which recorded falling then rising growth of +6.6 (YoY), -0.4% (YoY) and +4.9% (YoY) for weeks 1,2 and 3. The month’s final week (commencing 26 October) then saw online sales surge to a staggering +17.1% (YoY) – the category’s strongest performance since COVID hit. Footwear also finally recorded positive sales growth in the last week of the month, with spend rising by +2.7% (YoY). Meanwhile perhaps in a nod to seasonal change and the demand for outdoor heaters, garden sales continued to soar, with growth of +390.9% (YoY) for the month.
Mirroring the trend in sales figures since lockdown restrictions were put in place, multichannel retailers maintained their advantage over their online only counterparts, recording growth of +62.7% versus +19.6%.
Andy Mulcahy, strategy and insight director, IMRG, says: “When the first lockdown came in, most of the categories online recorded a massive uptick in demand, with home, garden and electricals all seeing triple-digit growth at some point during the spring. That demand was obviously being driven by the situation – the need to set up a home office, the sunniest spring ever etc. – and it did seem like some of them might run out of steam, but actually it has remained very high as we approach the peak period with little sign of slowing down.
“The upshot is that, provided stock levels hold up, November’s volumes are going to provide a really stern test for delivery. Not only was there a big jump in sales activity in the last week of October – suggesting people had started Christmas shopping earlier than normal – but we could see a huge share of sales brought forward from December too. This will be a challenge to manage but moving so much volume away from Christmas should ultimately prove positive.
Lucy Gibbs, managing consultant – Retail Insight, Capgemini adds: “October marks another turning point in the turbulent retail calendar this year; online weekly sales growth eased off after summer, however the final week jumped to 43% in anticipation of new lockdown measures. This time, the clothing category appears to be following the trend, also seeing the high weekly YOY uplift in the final week of October, with seasonal weather combined with outdoor meeting rules boosting demand.”
Gibbs concludes: “Although we have seen record breaking online growth over the summer months, order volumes were still well below that seen by recent years during peak events such as Black Friday. As non-essential retailers close their doors for the second time,the stakes will be higher: an uplift on online sales orders in double digits on top peak demand will impact already stretched supply channels. Retailers can capitalise on learnings so far to reduce the pressure and reassure customers, however a likely differentiator for success will be determined by service levels over the festive period. Will consumer expectations remain as forgiving on longer lead times as we approach Christmas? Or will this trigger a change in promotions and consumer behaviour to help spread the demand over the peak period?”
Shoppers prepared to queue for Black Friday deals
With Black Friday set to take place in the middle of Lockdown 2.0, UK consumers are set to take their globally recognised penchant for queuing into the digital realm, with some 24% of them saying they are prepared to sit in a digital queue for up to an hour to bag a bargain.
Research by Uswitch.com finds that some 24 million people — almost half of consumers (46%) — say they will be taking part in the annual sale this year, but while seven in ten (70%) shoppers aged 18 to 34 will join the hunt for bargains, only a fifth (22%) of over-55s will do so.
The closure of non-essential stores due to lockdown is set to drive shoppers online, meaning that virtual queues could be a feature of this year’s event.
Almost a quarter of people (24%) say they would be willing to wait longer than an hour in an online queue for a £200 discount, and 4% of Black Friday shoppers say they would happily spend six hours waiting.
Many people will take advantage of the fact they are working from home, with one in six (17%) saying they will wait in online queues while on the job. A fifth of consumers (18%) will practice yoga or exercise at home while they sit in a virtual queue, while almost three in ten people (29%) will play games on their phone, and 15% will laze in bed.
Shoppers might be advised to use any time spent in an online queue to carefully consider their planned purchase, as four in ten people (40%) admit regretting a Black Friday purchase. Nevertheless, despite millions rueing a previous Black Friday purchase, only 14% of these say that they would return what they had bought.
Online shoppers are more likely to compare purchases than high street consumers, with three in five web browsers (59%) visiting three or more stores to check the price of a prospective purchase, while half of those buying in-person (51%) considering only one or two shops. On average, web shoppers spent 17.3 minutes deciding on a purchase, five minutes longer than high street consumers who deliberated for only 12.6 minutes.
Lingerie sales more than quadruple while alcohol sales remain stale
New data compiled by global affiliate network Awin has found that lingerie sales were up +336% year-on-year (YoY) from the 5th November (start of lockdown) to the 8th, with an average order value (AOV) of £54.In total, sales were up +101% YoY and +29% up from the week before. Online sales in the home and garden (+167%), clothing (+94%), sportswear (+79%) and entertainment (75%) sectors also saw year-on-year increases.
Looking at the year-on-year difference in online sales, those for lingerie saw the biggest uplift, increasing by 336% when compared with the year before, with an AOV of £54.
Online sales in the home and garden (+167%), sportswear (+79%) and entertainment (+75%) sectors also saw a YoY increase in sales, with the average order value of both sportswear and entertainment increasing and home and garden remaining flat.
Sales of clothing almost doubled in the period YoY (increasing by +94%), but the AOV had decreased by 12%, likely caused by the reduced need for winterwear and Christmas party outfits.
Comparing the statistics to the first lockdown in March, similarly strong results are seen in the home, garden and sportswear sectors, but not in the sales of alcohol; in the first weekend of Lockdown 1.0, online alcohol sales soared by +300%, but this time around they saw just a +1% YoY uplift.
Conversion rates were generally up across the board compared with the year before, with the conversion rates for home & garden and lingerie both trebling, up to 9% and 23% respectively.
Joelle Hillman, Retail Client Partner at www.Awin.com, says: “With England being plunged into another lockdown, we wanted to once again see the effect this had on retail. As expected, sales of things like sportswear and home and garden items increased, with lingerie sales emerging as the biggest beneficiary. Although last lockdown saw alcohol sales soar, the ‘firm’ end-date of Lockdown 2.0 may be encouraging people to hold back, however we are expecting to see toys, gaming, books and general entertainment sales to continue to rise in the coming weeks.”