Ecommerce has been on the steady rise for years, but as online retailers continue to absorb a greater share of total retail expenditure, more and more stores have disappeared from the high street. Unsurprisingly, this has caused ecommerce to be viewed by many as a threat.
Yet during lockdown, ecommerce has been a saviour for many retailers. With varying degrees of restrictions having been in place for bricks and mortar shops for most of the calendar year, the UK has seen its overall retail sales dramatically decline. In April alone, the nation’s first month under a full Government lockdown, sales were down 19% year on year.
The saving grace has been ecommerce. This phenomenon, once viewed so sceptically, has been the one glimmer of hope for the retail industry, helping to keep thousands of businesses with an online function afloat.
Unbeknownst to many, the UK holds a world-leading position in ecommerce. The market is the third largest in the world and forms a significant part of the broader UK economy – in 2019, ecommerce was attributable to 7.94% of GDP.
There are several reasons as to why the UK is a frontrunner in ecommerce. Much of the technology powering ecommerce comes from the US, meaning the UK’s retail industry has a natural advantage in terms of speed of adoption, whilst a high smartphone penetration rate means the public has been equally quick to adapt. Additionally, with English being the world’s most popular second language, shoppers looking to purchase from countries abroad are more likely to use websites that are in English, if they cannot find one in their mother tongue. Finally, the small size of the UK offers a huge advantage in terms of logistics. Not only does this mean products do not have to travel long distances to meet customers, it also makes it easier for retailers to provide a multichannel shopping experience, with stock easily moved around to provide Click and Collect or Click and Reserve options.
Having such an established and successful ecommerce market has been hugely advantageous for the UK retail industry and individual businesses during the pandemic – but the shift to online operations hasn’t been easy for all.
Even for firms with an existing online model, new pressures emerged. A primary challenge for all was logistics, to ensure products were in the right place, at the right time, despite the UK’s whole logistics system being massively under pressure. Planning teams had to adapt to short cycles, to understand exactly what stock was needed where and to make sure it got there. Yet none of this is possible without a well-developed ecommerce system to prop everything up.
It’s understandable that ecommerce has for several years been viewed as somewhat a threat. Yet if lockdown has shown us anything, it’s that the UK should be appreciative for being so advanced in this area. The ease in which businesses can adopt ecommerce models offers them a huge advantage in comparison to other countries not so developed in the online realm, especially in times of hardship such as the pandemic.
2020 has been a challenging year for all retailers worldwide. Now, firms must learn from this experience, recognise that ecommerce is the way forward and invest in their online systems to support this shift change.