Usually, summer sees sturdy sales, ahead of peak, as shoppers are in holiday-spending mode. However, the past two years have changed everything, and it’s hard to tell what’s next as the warm weather brightens our days. So, what will summer look like for online retailers?
The market showed poor performance in April, according to UK ecommerce association IMRG, due to an overall growth rate of -12%. Growth did increase from March 2022, (when it was low due to being measured against lockdown growth) however, it was not enough to signify a stable market for the summer ahead. The online retail boom of the pandemic appears to be over, as the global economic crisis is being felt by retailers and shoppers alike.
With IMRG’s April market results showing poor pandemic recovery, there aren’t many categories experiencing positive growth at the moment. As of the 8th May, clothing was one of the few categories to have bounced back after negative growth in 2021 against the pandemic boom of 2020. Now, clothing is experiencing a resurgence after the lockdowns, whilst the rest of the categories are suffering. Makeup, garden, and garden furnishings were also seeing uplift, which is unusual within the context of our previous monthly results. The categories doing poorly are health and beauty (-32% YoY as of April) and garden (-23% YoY as of April).
YoY % Category growth – (08/05/22)
The good news is that traffic itself is increasing from a negative result, working its way back up towards 0% growth, currently at -0.03% in April. People are still browsing online, they may just be more difficult to persuade to part with their money. Shoppers are also spending more, as ABV is at an all-time high of £145—although this is likely just to cover costs of acquisition for many retailers. Retailers may need to increase margins to keep the same level of profit, to sustain business during tough times.
After looking at the data, we can see it’s going to be a tough summer for retailers, as it’ll take more than just a heatwave to persuade shoppers to spend. Customers are tightening their purse strings as the result of global and economic unrest. Shoppers expect a high quality product, for little money, with quick delivery, during times of economic pressure. With prices going up, quality delivery is one area shoppers should be able to rely on.
