Online Retail Growth Stalls
Online shopping is a current reality for today’s retail consumer, but its recent penetration of total retail sales appears to have plateaued. In December 2019 pre pandemic, the total turnover generated by online sales excluding motor trades was 5.9%. Five years on, the CSO statistics released for December 2023 indicated that online sales were at 6.2%, virtually the same as its 2019 equivalent results.
The current narrative surrounding online shopping is that it is consistently on the rise in popularity. Contemporary statistics contradict this narrative. As expected, online sales increased dramatically during the covid-19 pandemic due to lockdown and the closing of retail stores. In November 2020 during the second lockdown, online sales reached a staggering 16.5% of the total turnover generated, excluding motor trades. This statistical outlier fed into the widely held narrative that online was on track to taking over the retail market. Despite Covid and lockdowns causing a peak in online sales, present day data conveys that turnover generated by online sales have reverted to where they were in 2019.
It was inevitable that there would be some reduction in online sales when stores reopened but the prevailing idea at the time was that online sales would hold onto to some of the gains that it had made. One explanation as to why the online platform did not retain its momentum is that the fight for retail sales is not a one-sided battle. This is perhaps most evident in the Black Friday / Cyber Monday phenomenon. Black Friday started as a US retail sales event for the day after Thanksgiving. It was quickly adopted by online retailers who came out with Cyber Monday. Black Friday is now an established part of the retailer market in Ireland annually. It is a clear bunfight for spending between retailers of all sizes and trading formats. The retailer has adapted to the needs of the consumer who for the time being prefers to shop in store for the overwhelming majority of their purchases.
Author: Alison Manning, Graduate Surveyor, Bannon
Date: 8th February 2024
