Insights

Firebreak Lockdown Sees Online Sales Of Non-Essential Items Grow by 88%

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Gareth Morgan

Group CEO

The latest firebreak Lockdown across Wales brought a ban on supermarkets selling non-essential items. This was partly to protect smaller retailers that had to shut entirely so that they wouldn’t lose all of their trade. I questioned whether the people of Wales would do as the First Minister wanted and wait a few weeks to purchase from local specialist retailers, or whether those shoppers would do what we suspected and go online to spend their money instead.

With the team at Liberty, I picked 10 retailers offering non-essential items. These included household furniture, children’s clothing, adult clothing, books, stationery and a selection of beauty items (from cosmetics to perfumes) so a range of products that you could normally purchase in most large supermarkets across Wales but now exist in taped-off aisles, removed from sale.

Whilst it is obvious that marketplaces and huge retailers such as Amazon will do well from any lockdown, we wanted to see what would happen to independent retailers that each cater to just one market. These are the online equivalent to the kind of high-street retailer that Mark Drakeford and his cabinet are trying to protect.

We chose retailers with large numbers of UK wide visitors, so that we’d have as much data as was available to us and could do like-for-like comparisons with the rest of the UK. To keep the sample as fair as possible we mixed up the types of businesses examined – some are huge household name brands, whilst others are the type of ecommerce site you’ve probably never heard of unless you go online searching for the products they offer.

Since the start of January to the end of October, these 10 clients saw 17,419,814 visitors between them, making a total of 404,301 transactions worth £47,333,187. That equates to an average of 1,741,981 visitors purchasing 40,430 items worth £4,733,319 per website. Fortunately, we weren’t lacking in data.

Looking at the numbers from the first full 7 days post firebreak (24th – 30th October) and comparing them to the previous 7 days (17th – 23rd) we can see significant increases in the number of goods bought from customers based in Wales.

  • The number of users visiting these sites from within Wales increased by 44%
  • The number of products bought by Welsh visitors increased by 74%
  • The total revenue from Wales increased by 88%
  • The conversion rate of Welsh traffic increased by 84%

Not only were far more Welsh visitors landing on all of these 10 ecommerce sites, they were spending a lot more money. These people weren’t just browsing online, they were motivated buyers and nearly twice as likely to spend money with these retailers than in less restricted times.

A breakdown across the categories looks like this:

Back at the start of the UK-wide lockdown in March, we saw large increases in visitors and sales for most ecommerce websites across the UK. We wanted to ensure that this wasn’t the same phenomena repeating itself, so we compared this new Welsh buying behaviour to English traffic during the same period. Here’s what happened over the border during the same time period:

  • English visitors up 23%
  • English transactions up 13%
  • English revenues up 31%
  • English conversion rates up 45%

So whilst the local lockdowns in England have also had a positive impact for these retailers, it is the fact that they offer “non-essential” items that are unavailable during day-to-day shopping within Wales, that has meant the growth was significantly higher for consumers based in Cymru. Here is a comparison of buying behaviour in Wales versus England.

Whilst the traffic and transactions from across England over the 7-day period had also increased, the number of visitors was up just half as much as it was from Wales. And the value of transactions has only risen by about a third as much. English website users were far less motivated to seek out suppliers online and far less likely to purchase from them, as they could still buy these items off-line in the ways they were used to.

An example of the different performance across England and Wales for one online retailer

We can conclude that the fire break restrictions on supermarkets selling items like clothing, make-up, books and electrical goods are not having the effect that the Welsh Parliament were hoping for.

Rather than stop people from purchasing these items along with their food shop, so that they’d keep the cash to use with local specialist stores instead, the evidence is clear that people are going to spend their money regardless. Has the Welsh Government simply diverted this consumption online, meaning the high-street is losing out to ecommerce even more than usual?

People will purchase what they want as soon as possible and with the smallest amount of hassle. Since ecommerce came into our lives, we’ve grown used to having products available to us with the minimum of fuss, just a few clicks and we’ve ordered what we want. Expecting people to give up non-essential purchases and wait days or weeks for shops to open is just unrealistic – if it isn’t available in the supermarket then we just turn to digital options instead.

The Welsh public have proven that convenience and speed of delivery matter more than holding off purchases and spending that money locally. If you’re a small Welsh retailer, it’s more important than ever to have a functional, trustworthy e-commerce store to capture the increasing numbers of people who are buying online today, and will continue to do so in the coming months and years.

Two points I think that the Welsh Assembly should consider are the wider impact of this partial supermarket ban on the jobs market and the economy.

  1. Stopping Welsh supermarkets from selling non-essential items isn’t stopping those items from being bought by Welsh consumers. But it does mean the supermarkets are transacting less, so it will be at the jeopardy of supermarket jobs. By prohibiting the likes of Tesco, Asda and Sainsburys from selling goods such as washing machines, stationery, kids clothes, etc. and closing off huge sections of their stores, these retailers need less staff. Is this decision going to backfire by hurting the Welsh job market instead of protecting smaller shops?
  2. Of the ten clients we reviewed only one is Welsh. The vast majority of this money is leaving the Welsh economy and helping businesses that are headquartered in other parts of the UK or even further abroad (one parent company is US based and another is in mainland Europe). 

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By

Gareth Morgan

Group CEO

Gareth has experience across a wide range of Business Sectors from over 20 years working in marketing, including: B2B Tech, Financial Services, Ecommerce, Property. In particular he enjoys the day to day variety of working in Marketing. Every single day is different. Tomorrow it could be an event, attending a pitch, working on strategy, or…

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