The UK e-commerce scene has gone from strength to strength in the last 20 years, but the last 18 months have been very telling.
If the coronavirus pandemic had occurred 10 years ago, Zoom had only just been launched and online shopping wasn’t as prevalent in a lot of people’s lives. Today we are accustomed to scrolling through apps, ordering and expecting it to turn up within 5 business days, but in 2011, how often was your first thought to go online instead of into a physical store? E-commerce began to rise in the mid 1990s, with giants such as Amazon and Ebay beginning to make their mark on the world, and since then many companies have only followed suit. Last year, over 2 billion people bought goods or services online and e-retail surpassed $4.2 trillion. These global e-retail sales grew 27.6% compared to the previous year and accounted for 18% of all global retail sales.
But this success has to come from somewhere, and when it comes to having a successful online presence, it’s all down to the conversion rate. E-commerce sites in the UK have an average conversion rate of 1.88%, which on the global stage is a high conversion rate. While Asian (1.10%) and Italian (0.99%) conversion rates are lower, the UK still lags behind the US (1.96%) and Germany (2.22%). China’s conversion rate varies from 0.37% up to a massive 20%. The UK’s conversion rate shows our prominence in a global context and shows the importance of e-commerce, especially when we are stuck at home during a pandemic. After all UK consumers collectively spent 82 billion hours on shopping apps in 2020, which is up 30% from 2019
However, the overpowering effect of the pandemic is expected to fade by the end of 2024, where the increase in sales will level out again. Compared to 2020, 2021 was expected to have a 6.3% decline in UK retail e-commerce sales, according to eMarketer’s prediction. However this prediction was made in February 2021, and we stayed in one form of lockdown or restrictions until mid July, which was affectionately known as ‘Freedom Day’, so it may be different in reality.
Within the UK, e-commerce accounts for over a quarter of all retail sales in the UK, and this is expected to reach one third by 2024. In 2019, 21.8% of retail sales happened online, this was expected to increase to over 30% for the first time ever in 2021 and Amazon is expected to benefit the most from this surge by adding £2 billion to the UK sales.
2020 was clearly the biggest shopping year to date for the UK, but this also shows how the UK high street is going to begin to struggle, if it isn’t already. In January 2017, ParcelHero released ‘2030: Death of the High Street’ which was a high-profile report discussed in court about the future of the High Street.. As David Jinks, ParcelHero head of consumer research has said ‘Unless retailers developed an omnichannel approach that embraced both online and physical store sales, the High Street as we know it would reach a dead-end by 2030.’ And the latest figures seen for e-commerce show that the coronavirus pandemic has only sped up this process.
This all brings into question what changes we’ll see in the next 10 years for e-commerce and online retail. Changing trends for online shopping have definitely been invigorated due to the pandemic, but now will those habits stay, or, as eMarketer has predicted, will retail ecommerce sales take a sudden dip back to pre-pandemic levels?