Online retail sales soared to a 10 year high in April as high streets and shopping centres across the country remain closed, however clothing and footwear sales dropped significantly.
April’s online retail sales were up 23.8% year-on-year according to the latest IMRG Capgemini Retail Index, which tracks online sales performance at over 200 retailers.
Health and beauty sales soared, up 82% year on year. However, clothing sales sunk by 23.8%. Footwear and menswear sales were particularly badly hit, slumping by 31.1% and 33.5% respectively.
Andy Mulcahy, strategy and insight director, IMRG, said: “April’s data shows that demand is following a very logical pattern – with stores closed, people who would usually shop in physical locations have no choice but to switch online. Hence 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; 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.”
Lucy Gibbs, managing consultant for retail insight at Capgemini added: “Covid-19 has reshaped consumer spending patterns and shopping habits, which has been accentuated by the significant online growth in April. Customers to 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, however, 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. Retailers will need to listen to their customers, and find new ways to become increasingly transparent, flexible and innovative in order to navigate the rocky and uncertain road ahead.”
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