Online retail has broadly grown in recent years by the amount that might have been expected if the Covid-19 pandemic had never happened, new analysis suggests.
Online growth, says etail trade association IMRG, grew by 5% in 2019, before growing by more than a third (35%) the following year, with retailers struggling to keep up with demand. But since April 2021 online sales have declined every month except for November 2022 – when growth was by less than 1%. In 2022 as a whole, sales were down by 10.5% on the previous year. This year the IMRG predicts that sales will fall by 0.3% over the full year, compared to last.
IMRG, which tracks online sales for 200 retailers that together turned over £23bn from ecommerce in 2022, says that the comparison of lockdown and non-lockdown periods over recent years has made it hard to see how online spending has changed. But the value of the index in 2022 is 17% higher than the value in 2019. That equates to average growth of 5.7% a year – in line with the pre-pandemic growth rate.
It points in particular to online clothing sales tracked by the index, which are 25% higher than in 2019 – well ahead of the index as a whole, despite suffering during lockdown periods.
Andy Mulcahy, strategy and insight director at IMRG: “From an online retail value perspective, we might ask ‘pandemic, what pandemic?’ There was a train of thought that suggested existing trends had been accelerated by a decade in the space of a few weeks, but it has become apparent that we are creatures of habit and change simply doesn’t happen at that scale, at that speed. It is probably fair to say that the market is a bit better off than might have been expected if there was no pandemic; the rate of growth had been generally coming down over a period of years so it could have run at lower than +5% per year otherwise possibly.
“The cost-of-living crisis has caused a real shift in shopping behaviour, with conversion on retail sites dropping away markedly throughout 2022. If there was no Ukraine conflict, could more of that volume have been retained? We’ll never know of course, but the impact of the lockdowns on online retail now looks like a historical blip.”