The reopening of non-essential stores in April saw high street sales land a heavy blow to online shopping. April’s ONS retail figures show store sales bouncing back from the ropes, but the momentum is still with e-commerce, according to business experts.
New Office for National Statistics (ONS) figures show that online sales took a rare 5.6% dip in April, as shops were allowed to reopen their doors. Fashion retailers enjoyed the most significant bounceback, of almost 70%. April’s retail results reveal sales values rose 43.4% year-on-year against April 2020, the first full month of Lockdown 1, and 9.9%% month-on-month over March 2021, but online sales were left reeling, falling back by -5.6% compared to March.
In the latest round of the fight between the High Street and online sales, in-store sales dealt e-commerce a body blow, says David Jinks, head of consumer research at home delivery expert ParcelHero. These figures show that it is physical store sales that are now leading retail’s recovery. However, that doesn’t mean online sales are out for the count.
”At last, high street retailers have some news to celebrate,” Jinks said. ”In-store shopping certainly won on points in April, following the reopening of non-essential stores on “The Glorious Twelfth”. Household goods sales grew 10.2% in April compared to March, with clothing sales bouncing back from the ropes with a 69.4% growth against the previous month thanks to the re-opening of high street fashion stores.”
”All this is hugely encouraging and shows consumers still want to visit physical stores if they can feel safe. There’s no doubt that the success of Britain’s vaccination campaign has done a lot to increase public confidence. However, any retailer relying solely on increased high street footfall must realise it’s impossible to ever land a knock-out blow to online shopping.”
Successful stores must embrace e-commerce as a key part of an integrated sales strategy. Online sales are still an enormous 31.9% higher than they were a year ago in April 2020, when Brits first began the great switch to online.
ParcelHero’s independent research shows 46% of consumers have no intention of spending as much in stores as they used to do pre-pandemic. That’s backed up by April’s ONS figures, which reveal e-commerce still snatched 30% of all retail sales in the UK. That’s a drop from the record peak of 36.1% at the height of lockdown this February, but vastly higher than the 20% of all sales that online took in February 2020 before coronavirus hit.
‘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,” Jinks said.
According to Sachin Jangam, associate partner for retail at Infosys Consulting, the high street must look beyond the initial post-lockdown surge to really solidify their lasting power. He argues that offering products alone is no longer enough. To draw shoppers back to the high street time and again, retailers must offer an experience, and match the personalisation that consumers already get online.
“With many consumers having built up savings over lockdown, and eager to step out of home, the boost in high street spending, particularly the leap of almost 70% in clothing store sales, is no surprise,” Jangam said.
What happens when the post-lockdown novelty wears off?
After the current novelty of in-person shopping wanes, we could see a decrease in high street footfall, as shoppers return to the convenience of online purchases. To mitigate this, physical retailers need to invest in creating a personalised, valuable customer experience, according to Jangam. Simply offering products alone is no longer enough. The key to sustaining this renewed level of bricks and mortar sales is to know your consumer. Retailers need to invest in collecting and understanding consumer data, aligned to business ambitions, through effective engagement via digital marketing channels.
“It’s time for retailers to make the effort to engage with their customers, to create a truly personalised shopping experience that will garner loyalty. Innovative, next-gen digital campaigns that connect with the target audience, such as loyalty programmes offering vouchers for coffee, fast food and restaurants, coupled with online mall experiences supported by centre operators, will improve retailers’ understanding of their customer base. From this, high street retailers can create an experience that is valuable enough to pull consumers back to their store, time and again.”
Whether the numbers remain steady remains to be seen, primarily because consumer expectations and behaviour has changed, says Carly Thomas, senior director at Digital River. ”Convenience has become a key decision maker for shoppers. They’re now used to scrolling through a website or app from the comfort of their own home, clicking a button, and then expecting a delivery imminently. Queuing up outside of stores just isn’t as appealing to some.”
No matter how shopping is conducted, be it online or in physical stores, what really matters to consumers is the experience. This means if brands want to retain customer loyalty, and ensure repeat business, they need to be offering more than just the goods they are selling, or the service they are offering, Thomas said. ”To make brands stand out from their competition they need to be enhancing the customer experience, giving their customers something else to talk about and shout about.”
”While merchants with physical stores will need to look to experiences to entice shoppers, online brands will need to focus on the convenience of shopping online, increased focus on mobile, and using data to tailor the customer experience as well as develop a more personal relationship with shoppers to build brand loyalty.”
For Melissa Minkow, retail industry lead at CI&T, success in retail is a long game and snapshots in time rarely tell a full story.
“With recent foot traffic indicating the novelty of in-person shopping may be starting to wear off, brands must stay resilient during this critical period. This means continuing to invest in e-commerce, but also the more experiential component of brick-and-mortar that consumers have had to forgo over the last year, which will keep shoppers keen to return again and again,” she said.
Britain’s high street may have come out swinging, but for this to positively impact the Sterling, businesses need to find various ways to reach their customers. “Analysts had been expecting a big April; what they got was a blockbuster,” Ulas Akincilar, head of trading at the online trading provider, INFINOX, said.
“Preliminary figures for the month had come in strong, but the official data reveals just how and where months of pent-up demand was unleashed. The first thing to say is that the obituaries written about the high street now look a little premature.”
At 30% of all sales, online remains a huge force and well above its pre-pandemic level. ”That genie is well and truly out of the bottle, and online shopping habits are here to stay, especially in clothing and footwear – which saw only a modest decline in online share despite Britons’ new-found freedom to try on clothes in shops,” he explained.
“The big question now is how well this boom will sustain, and how much of it is the fleeting exuberance of a country enjoying the first significant easing of lockdown restrictions. With economic output picking up strongly in March and consumer inflation doubling in April, sentiment is strong and the spike in spending cannot be dismissed as a novelty. All of which is likely to put sterling and the UK markets back onto the front foot after a volatile week.”