UK e-commerce sales have fallen to their lowest level since the online boom started in March 2020, home delivery specialist ParcelHero reported this week.
Pointing at statistics that show that online sales fell from 37% of the entire retail market in February 2021 to 25% in June, ParcelHero head of consumer research, David Jinks, said: “A falling off in demand for online shopping was always expected, but it’s beginning to look as if the pandemic online bubble has burst.”
He pointed to e-commerce giant Shopify's decision to lay off 1,000 staff and Amazon’s move to cut its staffing levels by 6% in Q2 as examples.
“As people’s fears around visiting high street stores have subsided, our entrenched pre-Covid shopping habits have reasserted themselves. One big example is the collapse of online grocery shopping. Online food sales have fallen by 13% against this time last year,” he said.
The latest ChaseDesign Online Shopper Survey found the number of regular grocery home delivery shoppers had dropped by half to 16% from 31% in 2021, Jinks added.
Similarly Ocado’s 2022 half-year report revealed an 8.3% fall in Ocado Retail’s revenue, which Ocado attributed to “the challenging trading environment…[and] reduced basket sizes post-pandemic”.
Jinks said: “The fall in e-commerce is also being seen in traditional postal services. UK parcels delivered by the familiar postie, rather than couriers, are down 15% compared to 2021, and non-courier parcel volumes are hovering at just 1% above pre-pandemic growth levels.
Jinks said retailers must give equal weight to their online and high street services if they are to thrive in the post-pandemic economy.
"Struggling retailers without a great online operation, such as Animal, Oasis, Warehouse, BrightHouse, Cath Kidston and Debenhams, all entered administration in the first four months of 2020. Those that thrived have successfully integrated omnichannel offerings, vastly improving services such as click and collect to encourage online shoppers back into their stores.”
He added: “‘As retail returns to its default settings, it will be those retailers with strong in-store and online sales that will ultimately triumph in a post-Covid world.”