Despite recent shutdowns in the UK high street and two-centuries-old retailers such as Debenhams going bust, online sales have climbed yearly since 2006.

An accelerated digital shift is clearly happening.

And it is here to stay.

Let’s look at a few key reasons behind this.

To give you an idea of just how shopping habits in the UK are changing, the HostingData team has gathered the most pertinent online shopping stats for you from since COVID-19 and earlier — let’s start with a few key figures that exist on the topic:

(Stats mostly sourced from ONS.gov.uk, and includes how covid impacted UK e-commerce.)

1. In 2017, the United Kingdom saw its e-commerce’s total sales reach a record £586 billion — this was a sharp rise from the £484 billion in the previous year.

2.  By mid 2019, the United Kingdom’s internet sales represented nearly 20% of all retail sales — B2B e-commerce’s share of sales was £133 billion.

3. Indeed — 13 years of e-commerce growth (from 2006 to 2019) was 15%. See the below ‘the value of internet retail sales monthly’ graph, for the actual year by year increase.

4.  The best performing e-comm industries in the United Kingdom were clothes (this includes sporting), household products and holiday resorts — in descending order.

5. In 2020, the ‘food based delivery industry’ — by fast-food chains, catering or restaurants — took the place of holiday homes in popularity. (Source: Osome)

6. Jumping back to 2015 in the UK, the desktop sales were valued averagely at only £67 and £53.92 for mobile devices.

7. Only 4 years later — 82% of British people made some kind of online purchase. (Source: eMarketer)

8. While e-commerce’s share of total retail sales reached 21.8% in 2019 — by the end of 2020, this jumped to 30% for the first time — from 2-in-10 retail sales, to 3-in-10.

TL;DR

How Covid-19 changed UK e-commerce: it spiked online shopping. (Curiously, UK e-com sales were static for 3 successive years, 2014-2016 — a big contrast to today.)

Let’s look at a month by month visual of recent changes to total online shopping sales in the United Kingdom — to give you a broad view of trends:

The months inside 2014 to 2016 saw some dips and increases, but internet retail sales overall stayed the same. Then, from about May 2017, sales steadily began to increase. This general trend has continued until today.

2006 to 2019 saw e-commerce grow about to 20% of all retail sales.

In November 2006, e-commerce barely represented 3% — this amount spiked by about 800% in 13 years to reach 20%. During Christmas periods, this number predictably peaks.

But it wasn’t until July 2013 that online shopping represented 10% of all retail sales — even before the pandemic, it was predicted that there would be an upward trend. Indeed — the proportion of people in the UK who use e-commerce for some means of purchase has followed this forecast.

While not every individual UK used e-commerce for purchases in 2019, the number is nearly 30% more than the number who did a decade previous.

There was a large number of people who refrained from online purchases such as elderly folk. B2C e-commerce showed the same steady expansion in sales in the United Kingdom from 2012 the 2017 — while B2B e-commerce nearly doubled in value in only five years.

On midnight of March 23 to June 15, the UK government went about enforcing the closure of all nonessential retail companies as part of its lockdown policies. Other than for essential items like groceries and medications, UK consumers were for 12 weeks unable to purchase this in-person, in physical stores.

Even after the high street reopened, operations remained altered: Limits were placed on numbers of shoppers as a result of social distancing measures. Queues were commonplace. Large numbers of the population opted to stay at home in caution. It’s no surprise that retail e-commerce has a promising year ahead of it.

With the relaxation of restrictions, 2020 was likely a bumper year for online shopping. It may take a number more to achieve 2020’s height. Some forecasters predict however, that by 2023, numbers will stabilize to far higher than anything pre-pandemic, at almost £144 billion.

According to the ONS and Statista:

2019 unsurprisingly saw clothing (including sporting) and fashion take the first spot as largest e-commerce industry. Household goods came second, followed by holiday resorts.

At the very end of the list was e-learning. Next up were computer hardware and medicine. In contrast, travel arrangements took a wide share of the online shopping market.

In comparison, for 2020, food deliveries shot up to second-place. Others, like holiday resorts, travel arrangements and tickets for events disappeared altogether, for obvious reasons — allowing a whole host of other industries to have a larger market share.

Most Popular Ways to Pay 🪙

According to a 2019 survey by Attest and available on Statista:

49% of shoppers used PayPal for payments, and another 37% used credit or debit cards. This made PayPal the most popular online payment method in the UK for 2019.

According to E-commerce News EU:

73% of purchases made by shoppers in the United Kingdom in 2019 were from UK markets — while 16% were from EU locations and 11% from outside EU markets altogether. UK shoppers purchased a large portion of goods from overseas online stores, as compared to nearly almost any other developed country.

The most popular overseas markets for UK consumers were the US, Germany, the Netherlands and France. The UK–US trading dynamic is one of the highest-valued globally — and 2020 saw Brits spend more than €51.3 billion to get US products.

For France’s market: Perfumes, cosmetics and fashion (including Givenchi and Versarce) were the most popular items. A great deal of sales by American retailers were of fashion goods such as, notably, Forever21 and American Apparel.

2020 saw the UK’s largest online shopping sales ever, at $180.39 B in sales — two places behind China ($2,296.95) and under the US ($794.5).

But as the market corrects itself post-pandemic, a 6.3% decline in UK sales is predicted, amounting to $169.02 billion — as forecasted by eMarketer.

For this year, India is predicted to have the greatest percentage increase in online shopping revenue, growing 22%. And China near-equally, at a 21% increase.

The pandemic has reinforced digital shopping trends by UK consumers, including for those over 65. A September 2020 report by ChannelAdviser suggested that consumers continued to digitally shop even after physical retail stores reopened.

During the peak of lockdown in May 2020, 42% of UK digital consumers said they would do more digital shopping in the future. And by August, a month after nonessential shops were allowed to reopen, this number increased to 55%. Both polls suggest that online shopping will continue to be a substantial trend despite any skewing of data from the pandemic and lockdowns.

2020 was the highest spend in mobile e-commerce in the United Kingdom to date — with an accumulated 82 billion hours of time by consumers inside shopping apps (30% more than 2019).

Smashing retail apps in the UK included Tesco groceries with a year on year (YoY) growth rate of 150%, Amazon which grew by 55% YoY growth and SHEIN which spiked by nearly 500%.

Devices are more used for online tasks like paying bills. More consumers are comfortable with shopping from their phone, particularly via dedicated consumer apps and social media’s ‘buy now’ button-integrations.

A Google survey showed 59% of shoppers consider the ability to mobile shop as a key consideration when deciding on retailers or brands to use.

Statista also predicts that mobile commerce will grow a rate faster than any other digital business.

Online shoppers admit that they will stop buying from a merchant after having a poor experience, or if a competitor offers a superior one. Providing a better journey therefore is crucial for brand loyalty, and gives brands the advantage.

It’s no wonder that as many as 80% of companies already use or plan to use chatbots — which are able to announce special offers, initiate conversations on websites and to send out notifications. These particularly appeal to younger shoppers who have a preference for text messaging compared to email communication or phone calls.

The UK’s e-commerce share of the retail market will continue to expand in upcoming years. Consumers are already accustomed to handling aspects of finances online, like mobile banking. This comfort has only accelerated amid radical changes of remote working and increased food deliveries during the covid-19 pandemic.

There are ways for e-commerce companies who gain competitive advantage in the race for customer loyalty. One is to personalise the shopping experience to lead to greater customer satisfaction. According to Google, 40% of shoppers will spend more time than planned — if a shopping experience seems highly personalised.

Ways of personalizing the shopping experience includes showing recently viewed items and product recommendations to returning customers — offering a discount coupon for first time buyers.

Customer service, augmented reality and chatbots are other means of leveraging growing trends of customers who are doing digital purchases.

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