Will 2021 be an e-commerce Christmas?

Online sales of food and drink levelled out in October, but is a Christmas comeback on the cards for e-commerce? Experts had predicted that the rapid, Covid-related rise in digital sales would peter out eventually, and in October that appeared to be the case. The grocery market’s share of digital sales held steady at 12.4% for the second month in a row, according to Kantar.

However, the arrival of the Omicron variant – a ‘variant of concern’ according to the World Health Organisation – might bump e-commerce figures back up just in time for the holiday season. Delivery firm Parcel Hero expects Brits to spend £35.26bn online this year, matching last year’s spend due to a growing wariness of visiting physical shops.

“Last year, the closure of non-essential stores during November’s lockdown forced people to do much of their Christmas shopping on the web for the first time,” said Daivd Jinks, Parcel Hero’s head of consumer research. Online spending soared from £22.28bn in 2019, he said, while high streets had their worst ever holiday season. But while David does not expect a return to lockdown, shoppers are being more careful and ticking more off their Christmas lists online, he said.

“Online snaffled 44% of the £79bn Brits spent on presents and food last year. Many analysts forecast overall sales will rise to £84.7bn this year,” he said. “That means we still expect to see online sales level-pegging with Christmas 2020, even with a slight fall to 42% of the overall market. Before the arrival of Omicron, we had been expecting online sales to fall back by around £3bn.”

How to succeed online this Christmas

With Omicron now on the table, getting your e-commerce offering right is more important than ever. Almost half of UK consumers plan to only shop online in the run-up to Christmas, according to a survey by Outbrain, and with food and drink gifts offering a great opportunity for retailers, capturing an online audience is critical.

For many retailers, it’s now or never as Christmas cut-off dates approach. Plus, consumers are sorting their Christmas shops early this year, with nearly half starting before November, according to research by Quantum Metric. “Retailers need to really examine what is happening on their digital assets – websites and apps – around consumer behaviour to ensure they’re not missing opportunities to sell around Christmas by being too late to the game,” said Elissa Quinby, director of retail insights at Quantum Metric.

Be sure to clearly signpost final order dates and engage with customers on social media. Mark Smith of Double Up Social has suggested that, if they do anything this Christmas, Speciality Food readers should do three things: set up social media ads, create engaging content on Instagram Reels or TikTok and run Christmas giveaways to boost visibility.

Remember that you don’t have to do everything, however. In fact, it’s better to have ‘brilliant basics’ than spread yourself too thin trying to hit every possible customer desire, Michael Freedman, senior shopper insight manager at IGD, told Speciality Food. But today, barriers to online shopping are lower than ever. Quick commerce allows sub-30-minute deliveries and the idea of having fresh, artisan food delivered is no longer a daunting thought for customers. “People are getting used to digital channels,” said Mike Watkins, head of retail and business insights at NielsenIQ. “Consumers experienced and appreciated the benefits of the digital landscape, and there is no turning back.” 

In the UK, the ‘fresh’ category now makes up a third of total online grocery sales. “Historically, shoppers had barriers to buying fresh online, but it’s now clear the British shopper is more confident buying it online,” he said. “Above all, UK consumers are following a global movement and shifting their shopping habits towards an omnichannel experience.” A whopping 70% of consumers are now omnichannel shoppers. By offering a considered mix of in-store experiences and online convenience, retailers will hit all the right notes with their customers this year.