Online sales growth hits 10-year high in April as demand for fashion nosedives

Online sales growth surged to a 10-year high in April, reveals the latest IMRG Capgemini Online Retail Index. The data, which tracks the online sales performance of over 200 retailers, shows a year-on-year +23.8 per cent rise in e-commerce purchases. 

While the gardening, electricals and health and beauty categories experienced a tremendous uplift in sales, clothing sunk by –23.8 per cent. Within this, footwear and menswear sales were particularly poor, down -31.1 per cent and -33.5 per cent respectively.

Multi-channel winners

April’s online sales growth was overwhelmingly driven by multi-channel retailers. Seeing larger growth than online-only stores for the first time in a year in March, multi-channel retailers continue to benefit from consumers’ changing shopping habits. April sales were up by +35 per cent, compared to a rise of +8.3 per cent for pure play etailers. 

IMRG’s Andy Mulcahy comments: “April’s data shows that demand is following a very logical pattern. With stores closed, people who would usually shop in physical locations have switched online. Hence it is the multi-channel retailers who are securing the very strong growth at the moment, though whether it will be enough to entirely offset the loss of sales from those stores seems unlikely.But this is only true for some categories. Even with stores closed, online growth for multi-channel clothing retailers is still down -17.5 per cent. The demand just isn’t there at the moment.

“When that demand will return is a big question. If fashion retailers re-open stores and take staff out of furlough but their customers don’t return quickly, there could be a very difficult period ahead.”

Changing habits

 Capgemini’s Lucy Gibbs adds: “COVID-19 has reshaped consumer spending patterns and shopping habits. Customers are becoming accustomed to shopping online to fulfil their needs.  However, despite the positive figures, it begs the question whether this is enough to make up for the full impact of COVID-19 performance for the fashion sector. 

“We are also starting to see a differential by retail tier, with mid-market losing out to budget retailers. This is a trend to watch as consumers seek value for money in uncertainty. However, on the other hand, we are likely to see consumers looking for brand trust and quality. This can result in a squeeze in the mid-tier where appealing to both needs has been traditionally harder to balance. Retailers will need to listen to their customers, and find new ways to become increasingly transparent, flexible and innovative in order to navigate the uncertain road ahead.”

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