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Industry News

Published on July 8th, 2020 | by The GC Team

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The end of seasonal peaks?

Despite the reopening of the majority of High Street stores, the UK courier company ParcelHero says demand for home deliveries has now become “evergreen”, with seasonal peaks and troughs a thing of the past and home shopping, the firm expects, will remain at Christmas+ levels for this year and beyond. David Jinks MILT, Head of Consumer Research at ParcelHero, explains the reasoning behind this bold prediction

“Contrary to many analysts’ expectations, parcel deliveries and e-commerce sales have continued to climb in July despite most non-essential stores reopening on 15 June. ParcelHero has seen no sign of any decline in deliveries so far this month and is still experiencing Christmas+ level volumes. Many online retailers and couriers are experiencing the same high level of demand.

“Let’s be honest, the much-anticipated return to the High Street proved something of a damp squib”

“Let’s be honest, the much-anticipated return to the High Street proved something of a damp squib last month. The rapid recovery in retail sales in the first few days after non-essential stores were allowed to reopen fell off markedly during the following week, according to new data from business advisors BDO UK. Sales in the first few days after reopening on 15 June were only -7.1% down on the same week last year but collapsed to  -15.5%  the week after.

“In contrast, online sales are booming. Growth Intelligence says over 85,000 businesses launched online during lockdown and its loosening has done little to halt demand. In fact, there is strong evidence that the reopening of many High Street stores, ironically, actually boosted online sales. According to the online retailers’ association IMRG/Capgemini, multichannel retailers ‘recorded the highest online growth ever’ during the week when physical retailers reopened their doors.

“What all this means is that, even after town centre stores reopened, there was no sign of a fall-off in e-commerce. That’s not surprising, as A&M/Retail Economics estimates that 17.2 million British consumers have made permanent changes to the way they shop, as concern about catching the coronavirus in High Street stores redirects spending into online channels. Consumers who perceive the risk of Covid-19 to be very high are almost four times more likely to have shifted their shopping habits for the long-term.

“This perceived risk is unlikely to be alleviated with the announcement that Leicester has been forced back into lockdown for a second time, with other cities appearing on a Covid-19 watch list. Nor is the loss of appetite for High Street shopping likely to be reversed with the announcement that many famous High Street brands, including T M Lewin and Harveys Beds, have collapsed into administration or ditched their physical stores over the last two months. Even whole shopping centres such as Lakeside and Manchester’s famous Trafford Centre may be endangered following the collapse of Intu, the retail centres’ owner.

“In contrast, Britain’s couriers are booming. It’s not only ParcelHero that is significantly busier than normal for this time of year. One major UK courier is hiring 6,000 new workers, including 3,500 drivers, and investing £200 million in its network to meet demand from “the biggest boom in online retailing in the UK’s history”.

“At the beginning of lockdown, the front door became the front line in the fight against Covid-19. Britain’s new online shopping habit is one that most consumers, especially those older shoppers who have ventured online for the first time, will be reluctant to kick any time soon.”

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