The UK online retail market experienced the lowest rate of growth in 22 years of tracking. Online revenue in 2021 finished up +2.7% year-on-year against 2020, according to the latest figures from the IMRG Capgemini Online Retail Index, which tracks the online sales performance of over 200 retailers.
Following the huge growth in 2020, when lockdowns pushed online retail revenue up +35% – a seven-fold increase on the rate from 2019 – the very high comparison meant most of the growth in 2021 was actually negative. This can be seen in the 3- and 6-month averages, which were -13% and -11% respectively. The first quarter of 2021 was up +60%, while the other three quarters were down -9% collectively.
While this makes the performance of the online retail market sound poor, indexing 2021 against 2019 gives a very different picture. When analysed through this lens, the overall market was up +39% and the impact of the pandemic can be seen most clearly in some of the categories IMRG and Capgemini track.
For example, electricals were down -14% in December and only secured +3% growth for 2021 as a whole when compared with 2020; but when 2021 is compared against 2019, growth was actually +100%. Meanwhile, clothing – which was only up +1% in 2020 – is up +20% against 2019, so retailers in that category have done quite well, just not quite to the same extent that some other categories performed.
From a monthly perspective, December continued the negative trajectory for online sales in 2021 with -6.5%. However, this performance was far greater than in November, which saw online sales face a sharper decline than expected with just under -20%. December’s rate was the smallest decline since growth went into negative territory in May 2021, possibly due to sales being buoyed by concerns over an impending lockdown in December and high numbers having to isolate at home.
Andy Mulcahy, strategy and insight director, IMRG