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Most Online Purchases 'Still Reliant On Physical Stores', Study Finds

Published on Sep 21 2020 10:59 AM in Technology tagged: Featured Post / Amazon / Online / GlobalData / Multichannel

Most Online Purchases 'Still Reliant On Physical Stores', Study Finds

The growth in e-commerce during the COVID-19 lockdown period owes a lot to the physical retail channel, which saw click-and-collect orders soar, a new study by GlobalData has found.

The report, Multichannel Retail and COVID-19, found that shopping habits in the US and Europe 'shifted dramatically' during the pandemic, however online has far from become the dominant force.

Online Penetration

Transactions made through online channels did not exceed 30% of retail sales during the peak of lockdown in any country covered by the study, GlobalData said.

It also found that many online sales were supported by physical retail through 'click-and-collect' platforms, indicating the importance of multichannel retailing.

“Despite claims that the growth of online shopping is leading to a ‘retail apocalypse,’ the reality is that many retailers across all sectors are thriving because they are innovating with multichannel to provide a convenient shopping experience for consumers," commented Neil Saunders, GlobalData’s lead retail analyst.

"A very significant proportion of sales that are attributed to the online channel are, in fact, multichannel sales that rely on both stores and online for success. On average, one third of 'online' non-food purchases – where a customer actually transacts online – are in fact reliant on physical stores for product selection, pick up, or return,"

The findings in the study were taken from GlobalData's consumer panel, which tracked the shopping behaviours and purchasing habits of more than 82,500 consumers since the pandemic began, as well as using data from retailers.

Shopping Simultaneously

According to Saunders, the data shows that the notion that shoppers choose either 'online' or 'offline' for their shopping needs can be dispelled – consumers shop simultaneously across channels and see them as substitutable.

“The idea that there is a battle between online and physical retail is outdated," he said. "There is only one retail battlefield and the fight is between all the players on it. Those that have strong multichannel options with both an established store network and online presence now have the advantage."

Physical Stores

The report found that in the US, in the year to date, some 36% of online non-food spend will be supported by physical stores, which is up 2.6% since the start of the year.

It also found that at the height of the lockdown, 21.4% of retail sales were undertaken online, which is up 7.5% on the full-year 2019 percentage.

However, two months after lockdown ended, online sales as a percentage of all retail sales had fallen by 3.9 percentage points to a more modest 17.5%.

"This trend further confirms that retail customers do not distinguish between online and offline options," Saunders added.

"Retailers may plan in terms of channels, but channels should be invisible to the shopper who seamlessly move between them for browsing, product research, point of transaction, receiving the product and returns or aftercare."

© 2020 European Supermarket Magazine – your source for the latest retail news. Article by Stephen Wynne-Jones. Click subscribe to sign up to ESM: European Supermarket Magazine.

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