January 2022 saw weak online sales growth

The start of 2022 saw slow sales growth for online shopping, with online sales down 24.4% year-on-year (YoY) in the first month of the year, according to the Capgemini/IMRG Online Retail Index.

This looks very different from the 61.8% year-on-year increase in January 2021, which Capgemini largely attributes to the UK still being locked down and increasing online shopping.

Andy Mulcahy, director of strategy and insight at IMRG, said: “The first quarter of 2021 saw a severe lockdown which drove huge online growth, so YoY comparisons for the first few months of 2022 go be harshly negative accordingly. This can make online sales appear to be plummeting, when it’s really just a natural rationalization of the 50-60% increases we saw at this time last year. .

Online shopping has seen a huge increase over the past two years, with lockdowns forcing UK residents to use online channels to carry out daily tasks, such as shopping, from home.

The sudden increase in orders has led many retailers to increase their staff to meet the increase in online orders – for example, in March 2020, Amazon announced that it would add 100,000 additional workers in the United States to make facing a change in consumer buying behavior caused by the pandemic.

Tesco has also hired 16,000 staff to deal with Covid-19-induced shopping habits. Meanwhile Ocado was forced to pull its website after a huge spike in orders at the start of the 2020 UK lockdown period, later choosing to increase its tech workers by 300 in the first half of 2020 to cope with a increased demand as a result of the pandemic.

As 2021 drew to a close, the 2.7% year-on-year market growth was the lowest online growth rate recorded in the 22 years of the IMRG and Capgemini index.

Although there were reasons for the slow sales growth in January, Capgemini warned that online retailers could start to feel the pinch both due to the lifting of lockdowns and the rising cost of living. .

But while sales were weak, average basket spend rose month-on-month, from £106 in December 2021 to £115 in January, after falling steadily since August 2021.

Among the most popular verticals for online shopping in January 2022, fashion led the way, with clothing seeing a 5.4% year-on-year increase in online sales – when further broken down, clothing for women saw a 25.2% year-over-year increase in online sales, closely followed by a 19.4% increase for footwear and a 16% increase for men’s clothing.

But other categories didn’t fare as well, including skincare, which saw online sales drop 48.2% year-over-year in January this year; make-up, down 45.7%; and electrical appliances, which saw online sales drop 36.7%.

As things begin to calm down, Lucy Gibbs, senior manager, retail head of analytics and artificial intelligence (AI) at Capgemini, said restaurants and events, as well as the ability to travel, finally, will be a spending priority in 2022.

Before the pandemic, it was already predicted that online shopping would become the predominant way to shop. The year before the pandemic, Capgemini predicted that more than half of consumers would shop for food online by 2021. In 2018, 53% of young shoppers said they preferred to get their retail information online. online rather than in person.

Many believe the pandemic shift to the internet will continue after the pandemic is over, with O2 Business and Retail Economics finding that 44% of consumers do not plan to return to their pre-pandemic habits.

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David A. Albanese