In today’s InternetRetailing newsletter we’re reporting as the latest official figures show how shoppers’ buying habits changed during lockdown. The ONS Retail Sales report for June shows how shoppers bought more online in June across all categories, while buying less in-store. The finding that customer habits have changed at least short-term is reflected in updates from retailers including Hotel Chocolat, French Connection, Unilever, Naked Wines and Gear4music.
Online-only Naked Wines saw sales rise by 77% in its first quarter as shoppers turned online to buy, and the retailer thinks it is now “ideally placed” for the change in customer behaviour. Fellow pureplay Gear4Music also saw its sales rise strongly during an “exceptionally strong” quarter in which locked-down customers rediscovered their interest in music. Group sales rose by 68% in the quarter - to put that in context, sales in its previous full-year rose by 2%. However, the retailer has warned that of a potential impact on sales as the UK’s relationship with Europe changes.
The picture is less clearcut for multichannel retailers and brands that rely more on shops and other face-to-face sales channels. Unilever, which owns brands from Dove to Ben and Jerry’s, saw its online sales rise quickly but its food services revenues were hard hit during lockdown. However, many of the food, beauty and household products it sells are judged essential and so the company saw first half sales stay slightly ahead.
Hotel Chocolat reflected on a year of two halves in its trading update today. Sales rose in the first half of the year by the same 14% percentage that they then fell by in the second half of the year - putting overall full-year sales ahead by just 3%. It had its staff to thanks for an effort that included keeping digital demand relatively satisfied by going into shops to collect Easter stock for resale online. The effort has been a costly one, but, says Hotel Chocolat, it has left it in a more agile position than before, and the chocolatier and retailer is now expanding its distribution and manufacturing and expects to take on 200 new staff in its current financial year.
French Connection is likely to have been hard hit since it trades in the particularly vulnerable clothing sector where, ONS figures said, sales dropped by a third between February and June. The retailer pointed to a 24% rise in online sales in today’s trading update but said that in the short time its stores had been open, sales were improving slowly.
It will be interesting to see if the shift online that is so clearly documented in these figures continues in the coming months. It remains to be seen whether the now-mandatory use of face masks makes shoppers as a whole more or less likely to buy in-store. We’ll be watching with interest and will continue to report on all of these issues in future newsletters.
In today’s guest comment Ronald Dod of Visiture considers how sellers on Amazon might consider adjusting their Amazon strategies in the light of Covid-19. And we also refer you to this story on our sister site Tamebay to see how Amazon sellers are being affected by decisions that the marketplace has made in the light of Brexit.