May 18, 2020
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Covid-19 to boost e-tail long term, says GlobalData

May 18, 2020

E-tailers may be seeing a flood of orders in the face of physical store closures at present, but the segment is expected to enjoy a lasting boost, according to analysts at GlobalData.


The company’s Covid-19 Impact on E-commerce report says that the pandemic will “have a long-term positive effect on the e-commerce sector, with even the most sceptical consumers forced to abandon physical stores in response to restrictions on movement”.

That might not seem obvious to many fashion retailers at present, with large numbers reporting that as well as non-existent physical stores sales, their e-sales have fallen as well. Social distancing measures have so far dealt “a significant blow to clothing and footwear retailers,” the report says and GlobalData is expecting a drop in UK online sales of 7.9% from 2019 levels. 

But that’s more due to the general lack on interest in fashion and other categories at the moment. With consumers having been forced online during the lockdown, their realisation that it’s easier and safer to buy online than they thought could mean they continue to buy from webstores.

While the wider boost will help grocery retailers in particular, as they had lagged behind others in their customers’ adoption of e-commerce, the fashion sector should also be swept up in the e-tail growth.

But the big question is whether multichannel names or pureplays will see the biggest sales jump.

Analysts said specialist online retailers “will have an opportunity to grab market share from their high street rivals”. Yet other data from the latest IMRG Capgemini Online Retail Index suggested that multichannel retailers could benefit more. 

Its figures showed multichannel retailers outstripping the growth of their online-only counterparts last month, rising 35.8% compared to just 8.3% for the pureplays. It seems consumers forced online wanted to buy from the physical retailers they usually patronised.

Whichever way the shopping trend goes, GlobalData Analyst Luke Gowland said: “Companies will be focusing on their supply chains and how technologies such as the cloud, 5G, IoT, and blockchain can help to improve their efficiency and robustness. Ultimately, e-commerce will benefit from Covid-19 [and] even the worst affected companies will begin to build momentum once more once lockdown restrictions have been lifted.”

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