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Online retail sales soar but clothing sales plummet

Tom Bottomley
14 May 2020

Overall online retail sales were up by 23.8% year-on-year in April – a 10-year high – as high streets remained deserted during the lockdown.

However, the tale was not so good for the clothing sector, which felt the impact of COVID-19 on monthly sales for the second time – sinking -23.8% from April 2019.

Within that, footwear and menswear sales were particularly poor, seeing sales down -31.1% and -33.5% respectively.

All sales performance is according to the latest IMRG Capgemini Online Retail Index, which tracks the online sales performance of over 200 retailers.

Taking a closer look at the results, the spike in sales was overwhelmingly driven by multichannel retailers. After recording higher growth than their online only counterparts for the first time in a year in March, 2020, multichannel retailers continue to benefit from consumers’ changing shopping habits – with sales up +35% versus online only retailers’ more modest rise of +8.3%.

Andy Mulcahy, strategy and insight director at IMRG, said: “It is the multichannel 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. This is only true for some categories though as, even with stores closed, online growth for multichannel clothing retailers is still down -17.5%. The demand just isn’t there at the moment.

“When that demand will return is a big question for clothing retailers. If they reopen stores – and take their staff out of furlough, bringing all the costs back into the business – but their customers don’t return quickly, there could be a very difficult period coming indeed.

Breaking down the figures at a category level, the unusually hot April weather combined with the lockdown, triggered a monumental rise in gardening sales. Building upon March’s +94.4% year-on-year growth, this month’s sales were up an unprecedented +288%.

Meanwhile, electrical sales sparked an equally impressive +102% growth – likely indicative of remote working requirements and demand for at-home entertainment as consumers navigate home isolation. Further to success in February and March, health & beauty sales also continued to soar, with growth of +82%.

Lucy Gibbs, managing consultant at Retail Insight, Capgemini, commented: “COVID-19 has reshaped consumer spending patterns and shopping habits, which has been accentuated by the significant online growth in April. Customers have become accustomed to turning to online to fulfil shopping needs as non-essential retailers remained closed.

However, despite the positive figures, it begs the question whether this is enough to make up for the full impact of COVID-19 performance – particularly for the fashion sector which is still losing out as customers are purchasing for new environments rather than fashion.

“We are also starting to see a differential by retail tier, with mid-market losing out to budget retailers, a trend to watch as consumers seek value for money in uncertainty. 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.”

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