Commenting on the latest ONS Retail Sales Index, Dominic Goslett, director of retail for TransUnion in the UK, said: “The ONS retail sales figures for January 2021 show a drop of 8.2% when compared with December 2020. This won’t come as a surprise, given the impact of COVID-19 and the ongoing national lockdown that continues to affect sales. Only two sectors bucked the trend in January and saw monthly growth. Non-store retail – largely made up of online-only brands – was up 3.7%, whilst food stores increased by 1.4% compared with the month before.
“The growth in online retailing has been a consistent theme throughout the pandemic and highlights the major shift that has taken place within the sector. The ONS figures show that online shopping as a proportion of spend reached 35.2%, a steep rise on the previous year which stood at 19.5%, and all store types reported an increase in their proportion of online spending in January compared with the previous month.
“That shift was happening anyway, but COVID-19 has rapidly accelerated it. According to Gartner, the increase in online retail sales penetration in the UK in the three months between February and May 2020 is the same as what was achieved in the past 10 years. We’ve seen the dramatic impact of this in recent weeks, with news that online retailer Boohoo has acquired the Debenhams brand, leaving behind its historic department stores, whilst ASOS has bought the Topshop and Miss Selfridge brands, once high street meccas for young shoppers. As the face of the high street changes irrevocably, retailers need to adapt quickly in order to thrive in a competitive, digital environment.
“The rise of ecommerce brings into sharp focus the need for seamless customer experiences alongside robust fraud prevention methods. Delivering customer journeys that are smooth, safe and personalised is essential. Retailers need to be keeping up with the latest innovations to live up to the expectations of digital-savvy shoppers, whilst also implementing appropriate fraud prevention tools to stay ahead of the fraudsters that thrive in this faceless, digital environment. Our own research tracking the impact of the pandemic has shown that nearly a third of UK consumers have been targeted in a digital fraud attempt.
“The impact of COVID-19 will be long-lasting for the retail sector, but the shifts we’ve seen will also create huge opportunities for forward-thinking brands to make their mark in a radically changed retail landscape.”