Brits turn to booze and beauty to survive Lockdown 3.0

beerBrits have been stocking up on booze and make-up – but not necessarily at the same time – as January recorded the highest online sales since the pandemic began and the highest January sales on record since 2008.

That is according to the latest IMRG Capgemini Online Retail Index, which tracks the online sales performance of over 200 retailers and shows the boom in sales was reflected across all categories, with health and beauty and beer and wine sales up +102% year on year and +105% respectively.

Perhaps in a nod to parents stocking up on learning-from-home essentials, electrical sales remained extremely high at +206% YoY. As January discounts rolled out widely, even clothing sales, which have suffered throughout each of the lockdowns, recorded their highest growth since 2017 at +22% YoY, the report shows.

In total, despite the tightening of lockdown measures across the UK and a traditionally subdued month for shopping, online retail sales in January grew by 74% YoY, the highest rate of growth since lockdown began in March 2020 and a record-breaking 10 times higher than those recorded in January 2019.

Other notable spending trends in January include the surge in online-only retail sales, as consumers navigated the total shut down of the high street. While the gap between multichannel and online only has widened since the pandemic, the latter surged to a high of +31.2% YoY. Similarly mobile commerce was up +169.1% – the highest rise in spend since 2013.

Capgemini managing consultant of retail insight Lucy Gibbs commented: “January typically sees more subdued sales and a drop off from Christmas trading, however, the anticipation of a ‘return to normal’ met the reality of challenges in an ever evolving pandemic and customers once again turned to online shopping during the third national lockdown.

“Electrical online sales hit a new record for the sector at +206%, potentially related to parents sourcing the technology needed to power home schooling and entertainment. Meanwhile, an uptick in clothing performance is promising for the sector which was hard hit last year, perhaps an anticipation of change in the new year boosted by sales and new season products.

“The gap between retailers who thrived last year and those who were struggling to survive is becoming clear as news of brand consolidations are hitting the headlines with a focus on online value over the physical estates; what this means for the high street is yet to be determined, however it is clear that digital interactions will further dominate the future shopping experience.”

IMRG strategy and insight director Andy Mulcahy added: “The big change in online volumes was recorded between March and April, when the month-on-month (MoM) growth rate (which measures whether more or less money was spent in that month than the previous one) was up +37%; it is usually flat between March and April.

“Since then, the MoM rate has been much closer to where we’d expect it to be each month, which tells you that volume shifted online and has stayed there. Between December 2020 and January 2021 we’ve seen another big MoM gap appear, where the decline in volume following Christmas was only -20%, whereas it is usually around -35%. The introduction of the third lockdown, which is much stricter than the second, has served to supercharge online sales again for almost every product category – there were seven that recorded year-on-year growth of 170%+ in January.”

However, figures from Barclaycard show that overall consumer spending declined 16.3% year-on-year in January – the sharpest decline since May 2020 – as the retail, hospitality and travel sectors felt the full impact of national lockdown measures.

Data from Barclaycard, which sees nearly half of the nation’s credit and debit card transactions, reveals that spending on essential items grew 3.9%, bolstered by a 17% rise in overall supermarket expenditure, with online supermarket spend seeing significant growth (126.8%). This was driven by a surge in demand for home deliveries, with almost two-fifths (37%) of Brits saying they found it harder than ever to secure a delivery slot.

Even so, spending at physical food and drink specialist stores grew 40.5%, as Brits continued to support nearby independent businesses. This comes as nearly half (45%) say they plan to continue shopping more locally, even after lockdown ends, to support their community.

Barclaycard backs the IMRG Capgemini Online Retail Index findings that online retail surged 73.2% and accounted for 54.9% of all retail spend in January,

It also support the finding that specialist retailers, which include stationery shops and sports and outdoor retailers, recorded particularly strong growth online (87.7%), as many Brits bought equipment to home-school their children and keep fit while schools and gyms were closed.

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