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Europe’s retail analysts warily watch the recovery

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The marco-story of ecommerce in the time of pandemic played out across Europe in a condensed version during the week just ended, according to Signifyd’s Ecommerce Pulse data.

While there were plenty of reasons for celebration — overall ecommerce spending is up 31% over pre-pandemic figures, after all — the brightness and light did not shine on all commerce verticals equally.

And, in fact, a report this week from the British Retail Consortium and KPMG indicate that it is ecommerce that is carrying the weight of what could be viewed as a retail recovery, while brick-and-mortar stores continue to struggle. 

When it comes to ecommerce, spending week-over-week for the seven days beginning Aug. 3, were essentially flat. That did not stop some verticals, including the rather volatile Luxury Goods category, from seeing solid increases in sales.

In fact, Luxury Goods spending online was up 10% for the week. Electronics saw a 17% increase. Home Goods & Decor was up 9% and Fashion Apparel & Luggage was not far behind, seeing an 8% increase in sales.

Those were the best-of-times categories. On the worst-of-times side of the ledger, Business Supplies were down 29% for the week. The vertical has been battered throughout the pandemic (spending is down 36% from pre-pandemic levels), given it’s a time when many have stayed away from the office.

Grocery & Household Goods slid 28% in the recent week, while Beauty & Cosmetics, also known to be volatile, was down 21%. Auto, Parts & Tires saw its impressively strong run end, with spending in the category dropping 18%. But as further proof that a week does not a long-term trend make, spending in the vertical is 191% above pre-pandemic levels.

Even with non-essential stores open, schools in session in parts of Europe and many trying to will their way back to normal living, ecommerce continues to be the channel of choice for far more purchases than in the past.

The latest retail spending report from the British Retail Consortium and KPMG heralded the return of retail, pointing to the fact that spending in July was up 3.2% over July 2019, when you no doubt remember there was no pandemic. When like-for-like sales were analyzed, eliminating temporarily closed stores and including online sales, spending was up 4.3%.

Paul Martin, the head of UK Retail for KPMG, acknowledged ecommerce’s role in the solid report, explaining that online sales accounted for 40% of sales in the period analyzed — a figure that would have been unfathomable before the onset of COVID-19.

“Food and home focused categories like furniture, homewares and kitchen accessories remained among the strongest performers,” he added. “With many of us continuing to work from home, sales of computing equipment soared too.”

Again, ecommerce has been a major contributor to sales as families cocoon at home and spend time and money improving their surroundings. Home Goods & Decor spending, in fact, has increased 183% since the pre-pandemic period.

The BRC OBE, Chief Executive, Helen Dickinson was careful to point out that many retailers are still waging an existential battle, even as the data paints an improving picture overall. 

“Many shops continued to struggle as footfall was down, with many people still reluctant to go out, and fewer impulse purchases,” she said. “The strongest performance came from food, furniture and homeware, as consumers increasingly invest in their time at home, however, many shops, particularly in fashion, jewelry and beauty, are still struggling to survive. Online sales remained buoyant, slowing only slightly despite more shops reopening.”

It is hard to avoid the feeling that retail sales in Europe are defying gratuity as macro-economic conditions in general continue to be poor. The Guardian, for instance, reported that gross domestic product declines representing  “the deepest recession in a century” are expected to be confirmed later this week.

Now retail analysts’ attention will turn to back-to-school activity, particularly in the UK, to see if traditional buying patterns emerge.

Photo by Getty Images

Mike Cassidy

Mike Cassidy

Mike is the head of storytelling at Signifyd. A former journalist and a retail geek, he covers ecommerce and the way technology is transforming digital commerce. Contact him at [email protected].