Britain is in the middle of an eCommerce boom. Covid-19 and its accompanying lockdowns have forced businesses to adapt their offering to the online retail marketplace to survive, while compelling consumers to make online purchases due to the closure of shops. Written by Atul Bhakta, CEO of One World Express– pictured.
The Great British high street has undoubtedly seen the most significant changes thought the pandemic. With all non-essential retail being forced to close for large parts of last year, the relationship with consumers was broken – and nobody can tell whether it will be repaired. Additionally, when allowed to open for short periods between lockdowns, businesses were held back in their capacity by social distancing regulations limiting customer footfall. It is natural that in the face of these overnight changes, consumers would flock to online shopping.
Indeed, the OECD report that in the first two quarters of 2020, eCommerce held a 31.3% share of total retail expenditure in the UK. In the first quarter of 2018, this figure stood at just 17.3% – an astonishing near-doubling of its share of the British retail market. This underlines the rapid changes in consumer behaviour, and the impressive capacity of the UK’s logistical infrastructure to respond readily to these shifts.
It should, of course, be noted, that there are many credible arguments to be made for eCommerce’s growth proving unsustainable over the coming months. Some would argue that as consumers had no choice besides online shopping, they will naturally return to traditional retail as soon as they are able. Others could point to lockdown representing a bottleneck of in-person consumption, which will be released in a cathartic wave as shops, restaurants, cinemas, and theatres are allowed to reopen.
These consideration should not be dismissed outright; however it must be noted that the past year has been no mere spike in demand. Online retail has been trending upwards at a steady but reliable pace, for years. A mass exposure to the convenience factors, and uptake in what would previously have been considered ‘risk-taking’ by consumers, could point towards the eCommerce boom being sustainable in the long term.
Embracing the change
A recent survey conducted by Retail Economics and NatWest found that almost half of UK consumers (46%) have reported making online purchases during the pandemic for goods or services they would only previously have made in physical retail outlets.
This is a telling figure. The social factors and perceived reliability of physical retail have created a relationship between consumer and physical retail which has been challenging for eCommerce businesses to chip away at. However, with consumers forced indoors, it is natural they would turn to online services. It will be interesting to observe in the coming months whether, for instance, the clothing industry is able to retain its high online sales levels with shops beginning to reopen.
On the other hand, businesses who have traditionally traded in physical retail have been forced to pivot to digital, too. Businesses of all shapes and sizes have, for obvious reasons, had to prioritise survival over long-term business growth strategy and revenue maximisation. Accordingly,
eCommerce has provided many firms with a crucial means of reaching their customers, which they have embraced adeptly.
So, businesses and consumers who were reluctant to become full converts to online retail have, out of necessity, changed their behaviours. While these habits will vary greatly by industry as the dust settles on the pandemic, the mass exposure to the convenience factor of eCommerce is a promising signal for its long-term sustainability in the overall retail market.
A flash in the pan?
As discussed above, there will of course be doubts over this acceleration in market share as simply a short spike built on unsolid foundations, or if it marks a new era for businesses and consumers.
The signs for eCommerce firms are certainly encouraging. Statista reported recently that the value of UK online retail sales in 2020 reached £99.31bn. This is an increase of more than 30% on the year prior. Increasingly, businesses are recognising online retail as a growth area with a very high ceiling, and rich rewards for successful adoption.
Britain’s logistical infrastructure will play a huge part in this. The convenience factor will always be online retail’s unique selling point over the high street, and with great strides made to further improve the quality of service, this trend can continue indefinitely. Advancements in delivery services have increased the reliability of online purchases, helping cast aside past consumer perceptions and win crucial trust. In practice, this has meant the faster, cheaper, and more customisable shipping options, the ability for both consumers and firms to track goods, and seamless returns processes which can in many cases be more convenient than physical retail.
To revisit the prior example of the clothing industry, many outlets have introduced generous returns policies, and have integrated into the shipping and packaging all the necessary tools for easy return of unwanted goods. In many cases, these processes are more straightforward and customer-friendly than a second trip to the shops. As these practices become more widespread, it will be intriguing to note whether consumers rely less and less on the ‘eye test’ benefit of in-person retail.
It goes without saying, but should be said, that these advancements hugely benefit customers and will do much to win their confidence in online retail. This detail will be crucial – trust will, of course, lag behind the established relationships consumers have with the high street. However, as trust begins to catch up to convenience, businesses who have embraced eCommerce may see the boom continue for the long haul.
Atul Bhakta is the CEO of One World Express, a position he has held for over 20 years. He also holds senior titles for other retail companies, underlining his vast experience and expertise in the world of eCommerce, trade and business management.