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Mixed results for online sales in first month after non-essential retail reopens

May 28, 2021
Mixed results for online sales in first month after non-essential retail reopens

One month on from non-essential retail reopening, early data shows online sales have declined by 6% against the previous month. Sales typically decline by just 3% at this time of year, indicating that customers are diversifying their spending.

That’s according to referral marketing platform Mention Me, which has analysed online sales and referrals from over 320 brands across six key retail sectors.

Key findings include:

• Early data shows online sales have declined by 6% against the previous month – sales typically decline by just 3% at this time of year, indicating that customers are diversifying their spending.
• After a strong Q1 performance, the home and garden sector saw the biggest month on month fall in online sales at 11%. Mention Me’s analysts attribute this fall predominantly to restrictions easing, as online sales for this sector were steady in these months pre-pandemic.
• Travel was the only sector to see a significant boost in online sales, up 18% on the previous month.
• In previous years fashion sales have dropped -4% during this period; this year they dropped -5%.
• Health and beauty would typically see an increase of +4% for this period, with +2% reported for 2021.

After a strong Q1 performance, the home and garden sector saw the biggest month on month fall in online sales at 11%. Mention Me’s analysts attribute this fall predominantly to restrictions easing, as online sales for this sector were steady in these months pre-pandemic. Now, people are instead embracing the opportunity to socialise outdoors at pubs and restaurants, and return to the office.

Sector results

Travel was the only sector to see a significant boost in online sales, up 18% on the previous month. Those booking holidays were also more likely to ask friends for booking recommendations, with referrals in the sector up 10%.

Meanwhile, more social events on the horizon meant the health and beauty sectors remained close to expected levels. In previous years fashion sales have dropped -4% during this period; this year they dropped -5%. Health and beauty would typically see an increase of +4% for this period, with +2% reported for 2021. The gifts and occasions sector also remained steady.

Online orders for food and drink brands have remained strong (dropping just 3% month on month) even as outside service at hospitality venues has resumed. Referrals for the sector remain the same as last month, suggesting consumers are continuing to both buy from and recommend their favourite food and drink brands to friends.

Looking ahead

Mention Me anticipates online orders and referrals recovering once the novelty of shopping in-store subsides. This prediction reflects consumer behaviour trends from summer 2020, when non-essential retail reopening had minimal long-term impact on online sales. Despite the slight dip now compared to last month, online orders and referrals across all sectors excluding travel remain significantly up relative to pre-pandemic levels at 25% and 16% respectively.

Commenting on the data, Mention Me’s Head of Retail Insights, Simon Dring said, “While uncertainty will continue to dominate over the coming months, in-store retailers will be breathing a sigh of relief that consumers are still interested in what they have to offer. Early signs look promising, but to sustain this, brick-and-mortar retailers must find ways to differentiate from their online competitors. If they can’t, they risk losing business once the novelty of shopping in-store fades.

“Whether online or offline, the only way to keep new or returning customers is through brand loyalty, targeted engagement and customer retention strategies. That’s why we’ve seen more and more retailers focus on connecting with and nurturing relationships with their target customers over the past year.

“The shift online was happening long before the pandemic and I don’t think the tide has turned again. Success for these retailers lies in combining on and offline channels to create smooth omnichannel experiences. Meanwhile, pureplay online brands must act now to convert people from first-time purchasers and “online curious” into loyal customers.“

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