UK online sales will settle at £12.8B, as e-commerce’s 25% market share becomes the new normal - CILT(UK)
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UK online sales will settle at £12.8B, as e-commerce’s 25% market share becomes the new normal

12 August 2021/Categories: CILT, Industry News, Logistics & Supply Chain

As shoppers return to the High Street, online sales have fallen for four months in a row, with Amazon and Etsy reporting a marked slowdown in growth. But e-commerce expert ParcelHero predicts online will level out at a quarter of all retail sales.


Shoppers may be flooding back to High Streets and shopping centres, but online sales are still booming. 


According to the home delivery expert ParcelHero, our shopping habits post-Covid will result in e-commerce levelling out at around 25% of all retail sales. 


That means that UK internet sales will be worth around £12.8bn annually.


ParcelHero’s Head of Consumer Research, David Jinks M.I.L.T. said: “Our figure of 25% is a significant fall from the 36.1% of all retail sales that online grabbed last February at the height of lockdown. 


“However, it’s still a huge increase on the 19% share online used to take, before the pandemic permanently shook up retail.


‘For some months now, retailers have been trying to guess what the new normal will look like. We believe the picture has now become a lot clearer.”


According to Jinks, while cash registers have been ringing more frequently in stores ever since non-essential shops returned to life on 12 April, ParcelHero’s own research shows that 46% of consumers have no intention of returning to their pre-Covid, High Street spending levels. 


He said: “Online sales fell 4.7% in June compared to May, and they have been falling every month since March, but not at such a rate as to indicate shoppers have abandoned their new online spending habits. 


“As a result, everyone has been trying to assess the new “natural order” and it’s looking like online will permanently secure around a quarter of all retail spending.”


Jinks added: “We’ve looked at data from the smallest online marketplace traders to the largest retail behemoths such as Amazon. 


“There’s no doubt the growth in online spending has slowed dramatically, but any retailer trusting that things will return to how they were pre-pandemic will be sadly mistaken.”


At the peak of the pandemic, Amazon was experiencing growth of 41%. In contrast, its gross revenues are expected to grow at “just” 10% to 16% next quarter. 


Jinks said: "That’s a big slowdown but, significantly, the continued projected growth indicates that post-Covid shoppers will keep the online habit.”


ParcelHero anticipates there will be something of spending spree on our High Streets during August, as everyone enjoys the Great British Staycation. 


Jinks added: “However, the return of colder weather this autumn will likely see new concerns about Covid-19, flu and other illnesses. Everything points towards long-term equilibrium, with online spending maintaining a 25% hold on the UK’s overall £51.4bn retail spend.


“Ultimately, the fight between online and in-store sales must end in a draw. 


“An omnichannel sales strategy, embracing both shop and online sales, with both services complementing the other, is the only way forward as retail claws its way back from the clutches of the coronavirus.”


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