Author: Mintel Group Ltd.
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Online Retailing: Inc Impact of COVID-19 - UK - August 2020

OVERVIEW
What you need to know
Key issues covered in this Report
COVID-19: Market context
Economic and other assumptions
EXECUTIVE SUMMARY
The impact of COVID-19 on Online Retailing 
Figure 1: Expected impact of COVID-19 on the online retail market, short, medium and long-term, 12 August 2020
The market
COVID-19 to drive significant growth for the online channel 
Figure 2: All online sales and forecast (including VAT), 2015-25
Heightened demand leads to record penetration levels for online 
Figure 3: All online sales as a percentage of all retail sales, 2015-24
Over two thirds of demand comes from three categories 
Figure 4: Estimated breakdown of all online sales by product category, 2019
Companies and brands
Online-only players grew their dominance in 2019, but COVID-19 has reversed this trend 
Figure 5: Share of online sales, by broad type of retailer, Jan 2016-Jun 2020
Amazon the dominant player online 
Figure 6: Top ten online retailers within the UK by estimated market share (ex-VAT), 2019
The challenges of COVID-19 bring new services that can break down barriers for online 
Figure 7: Currys PC World ShopLive, April 2020
The consumer 
The timing of our research 
Vast majority already shopped online… 
Figure 8: Frequency of online shopping, by age, April 2020
…but COVID-19 will have created a higher frequency of shop 
Figure 9: COVID-19 behaviour: Online shopping use, April-July 2020
Smartphones continue to play an ever-greater role in online retailing 
Figure 10: Devices used to shop online, 2018-20
Over nine in ten online shoppers use Amazon 
Figure 11: Online retailers shopped with in the past year, April 2020
Convenience and cost critical online 
Figure 12: Important factors when shopping online, April 2020
Social media playing a bigger role than ever in online retail 
Figure 13: Sources of inspiration/alternative purchasing platforms, April 2020
Trust a key issue on social media 
Figure 14: Attitudes to shopping online and on social channels, April 2020
IMPACT OF COVID-19 ON ONLINE RETAILING 
The Market
Confidence and spending take a significant hit during lockdown  
Online to account for a record percentage of retail in 2020 
Longer-term opportunities exist in the broadening of the repertoire and frequency of shop 
The consumer
Vast majority are already online shoppers, but COVID-19 may drive greater frequency 
Mobile purchasing continues to climb
COVID-19 may bring a step-change for social platforms in terms of true commerce 
Companies and brands
COVID-19 brings greater online penetration for store-based players 
COVID-19 may give peer-to-peer platforms a boost 
COVID-19 has forced technological innovation which will have longer term consequences 
ISSUES AND INSIGHTS
The long-term impact of COVID-19 and reshaping of UK retailing
The opportunity for new platforms in a post COVID-19 world 
A starker light will be shone on the ethics of online retailing 
THE MARKET – KEY TAKEAWAYS 
Confidence and spending take a significant hit during lockdown  
Online to account for a record percentage of retail in 2020 
Longer-term opportunities exist in the broadening of the repertoire and frequency of shop 
A record year of store-based players online 
MARKET DRIVERS
Confidence fell dramatically when COVID-19 lockdown was imposed
Figure 15: The financial confidence index, January 2015-July 2020
Real wage growth dives on back of COVID-19 recession fears
Figure 16: Real wage growth: average weekly earnings vs inflation, Jan 2016-July 2020
The hit to confidence significantly impacted spending patterns 
Figure 17: confirmed and planned spending activities, Jan 18 – Jul 20
Retail sales decline by record levels during lockdown
Figure 18: Annual % change in all UK retail sales (excluding fuel), by value and volume, Jan 2019-Jul 2020
Figure 19: Percentage change in value retail sales, by category, in the first half (Jan-Jul) 2020
UK household broadband internet access nearing saturation level
Figure 20: UK household broadband internet access, 2012-19
Smartphones increasingly used to access the internet
Figure 21: Ownership of mobile phones, January 2012- September 2019
MARKET SIZE AND FORECAST
The impact of COVID-19 on Online Retailing 
Figure 22: Expected impact of COVID-19 on the online retail market, short, medium and long-term, 12 August 2020
Lockdown
Re-emergence
Recovery
Prior to COVID-19 growth was slowing in the channel… 
…however COVID-19 will drive the sector to record levels 
Figure 23: All online sales and forecast (including VAT), 2015-25
Figure 24: All online sales and forecast, 2015-25
Online to account for a quarter of all retail sales in 2020 
Figure 25: Online sales as a percentage of all retail sales, by broad category, October 2019 – June 2020
Figure 26: All online sales as a percentage of all retail sales, 2015-24
Market drivers and assumptions
Figure 27: Key drivers affecting Mintel’s market forecast, 2015-24 (prepared on 14 August 2020)
Learnings from the last recession
Figure 28: All online sales, 2006-12
Forecast methodology
MARKET SEGMENTATION
Store-based players have grown rapidly since lockdown  
Figure 29: Share of online sales, by broad type of retailer, Jan 2016-Jun 2020
Breakdown of sales by type of retailer 
Figure 30: Online sales, by type of retailer, 2019
Detailed breakdown of store-based players online 
Figure 31: Detailed breakdown of online sales, by types of retailer, 2017-19
Detailed breakdown of online-only players
Figure 32: Estimated breakdown of online-only retail sales, by top 100 online-only players in the UK, 2018/19
Figure 33: Estimated breakdown of online-only retail sales, by number of retailers, 2018/19
Breakdown of sales by product category 
Figure 34: Estimated breakdown of all online sales by product category, 2019
Figure 35: Estimated breakdown of all online sales by product category, including VAT, 2017-19
DIGITAL SPENDING 
Books – an equilibrium being found 
Figure 36: Value of consumer print book and publisher UK sales of consumer digital books (net invoiced value), 2014-19
Music - streaming now key 
Figure 37: Spending on recorded music, 2014-18
Video – streaming gets a boost during lockdown 
Figure 38: The video market, 2016-18
Gaming – physical still key but downloads growing 
The total download market 
Figure 39: Estimated total identified digital spending, by category, 2019
THE CONSUMER – KEY TAKEAWAYS 
Vast majority are already online shoppers, but COVID-19 may drive greater frequency 
Mobile purchasing continues to climb
COVID-19 may bring a step-change for social platforms in terms of true commerce 
WHO SHOPS ONLINE AND HOW FREQUENTLY THEY SHOP 
The timing of our research 
Online shopping is for all
Figure 40: Usage of online retailing, by age and gender, April 2020
Almost a third shop online weekly
Figure 41: Frequency of online shopping, April 2020
Figure 42: Frequency of online shopping, by age, April 2020
Almost a third have increased their online use in the past year 
Figure 43: Changes in online shopping use in the past year, April 2020
PRODUCTS PURCHASED ONLINE 
Fashion is the most popular online purchase
Figure 44: Products purchased online in the past year, May 2019 and April 2020
Products purchased by age
Figure 45: Products purchased online in the past year, by age, April 2020
Product repertoire is broadest among 35-44 year olds and the most affluent
Figure 46: Repertoire of product categories purchased from online in the past year, by age, April 2020
DEVICES USED TO SHOP ONLINE 
Half of respondents are now using mobile devices to make online purchases
Figure 47: Devices used to shop online, 2018-20
Middle-aged shoppers as likely to shop using a smartphone than with a desktop or laptop
Figure 48: Devices used to shop online, by age,  April 2020
Browser-based mobile shopping still most popular, but app use growing
Figure 49: How smartphone/tablet shoppers shop when on the move, April 2020
Smartphones driving on-the-go shopping 
Figure 50: Engagement with shopping on the move, by age, April 2020
RETAILERS SHOPPED WITH ONLINE 
More shopped with online-only retailers in the past year 
Figure 51: Types of retailers shopped with in the past year, April 2020
Amazon the dominant online-only player…
Figure 52: Online-only retailers shopped with in the past year, April 2020
Figure 53: Store-based retailers shopped with online in the past year, April 2020
… and overall the largest player in the online market 
Figure 54: Online retailers shopped with in the past year, April 2020
Figure 55: Leading online retailers, by age and household income, April 2020
Repertoire of online-only retailers used narrower than that of store-based shoppers 
Figure 56: Repertoire of retailers used online, April 2020
KEY DRIVERS TO ONLINE PATRONAGE 
Convenience still crucial online 
Figure 57: Important factors when shopping online, April 2020
Figure 58: Returns behaviour, July 2019
Cost key for older shoppers 
Figure 59: Important factors when shopping online, April 2020
While online is the growth area of online it does face challenges 
Figure 60: Attitudes towards stores and online, April 2020
IMPACT OF SOCIAL MEDIA ON SHOPPING BEHAVIOURS
Social media continues to grow as a platform to influence purchases 
Figure 61: Sources of inspiration/alternative purchasing platforms, April 2020
Younger shoppers in general more likely to be influenced by online sources 
Figure 62: Influence on purchasing by social channels, by age, April 2020
Figure 63: Influence on purchasing by key sites, by age, April 2020
The pivot from influence to direct commerce 
Figure 64: Facebook/Instagram Shops, May 2020
To capitalize on this opportunity social channels need to emphasize trust 
Figure 65: Attitudes to shopping online and on social channels, April 2020
THE IMPACT OF COVID-19 ON ONLINE SHOPPING BEHAVIOUR 
Concerns remain high around contracting the virus… 
Figure 66: Level of concern regarding exposure to COVID-19, February-July 2020
…which continues to translate into hesitancy around going in-store…
Figure 67: COVID-19 behaviour, time spent in-store, April – July 2020
…and into greater online demand
Figure 68: COVID-19 behaviour: Online shopping use, April-July 2020
Older shoppers rely on online during the lockdown
Figure 69: COVID-19 behaviour: Online shopping use, by age, April-July 2020
Early peak in demand did create bottlenecks 
Click-and-collect uplift limited, but there are significant opportunities in the second half 
Figure 70: COVID-19 behaviour, click-and-collect use, April – July 2020
Figure 71: Amazon Hub incentive, August 2020
Learned behaviours in lockdown open up new modes of service  
Figure 72: Currys PC World ShopLive, April 2020
A smartphone-based physical shopping experience brings significant opportunity for online 
Figure 73: ASOS app incentive, July 2020
COMPANIES AND BRANDS – KEY TAKEAWAYS 
Amazon the dominant player 
COVID-19 may give peer-to-peer platforms a boost 
COVID-19 has forced technological innovation which will have longer term consequences 
LEADING ONLINE RETAILERS 
Amazon remains the standout performer in the online marketplace
Figure 74: UK: top 30 leading online retailers 2017/28 - 2019/20
MARKET SHARE
Amazon accounts for over a quarter of online spending 
Figure 75: Top ten online retailers within the UK by estimated market share (excluding VAT), 2019
Figure 76: Top 20 online retailers within the UK by estimated market share (excluding VAT), 2017-19
LAUNCH ACTIVITY AND INNOVATION
Use of Artificial Intelligence and Augmented Reality grows 
Figure 77: IKEA Augmented Reality feature, 2020
Retailers are launching or expanding online offerings
Figure 78: Co-op delivery robots in Milton-Keynes 2020
Online moves offline
Figure 79: Selfridges’ Instagram collaboration the ‘Instagram Edit, 2019’
Online live-chat is a valuable new channel for customer engagement
ADVERTISING AND MARKETING ACTIVITY
Advertising expenditure flat year-on-year in 2019
Figure 80: UK online retail: recorded above-the-line, online display and direct mail total advertising expenditure, 2016-20
Amazon once again the UK’s biggest online retail advertising spender
eBay campaign flags up fast delivery and convenience benefit
Net A Porter runs first sneaker campaign
Ocado commitment to service campaign
Convenient Christmas shopping with Moonpig
Shop Direct Home Shopping digital out-of-home Black Friday campaign
Boohoo and Pretty Little Thing adverts banned
Figure 81: Leading UK online retailers: recorded above-the-line, online display and direct mail total advertising expenditure, 2016-19
Digital advertising dominates
Figure 82: UK online retail: recorded above-the-line, online display and direct mail total advertising expenditure, by media type, 2019
Nielsen Ad Intel coverage
BRAND RESEARCH
What you need to know
Brand map
Figure 83: Attitudes towards and usage of selected brands, November 2019 – June 2020
Key brand metrics
Figure 84: Key metrics for selected brands, November 2019 - June 2020
Brand attitudes: ao.com for online service and Boots for trustworthiness
Figure 85: Attitudes, by brand, November 2019 - June 2020
Brand personality: ASOS and eBay fun brands
Figure 86: Brand personality – macro image, November 2019 - June 2020
Headline: Boots is perceived as reliable and welcoming
Figure 87: Brand personality – micro image, November 2019 - June 2020
Brand analysis
Amazon: ubiquitous with excellent customer experience
ao.com: a great service and accessible
Argos: well-known and used, but lacking excellent shopper experience
John Lewis: expensive but worth paying more for
ASOS: fun and a great online experience
Boots trustworthy and reliable
Ocado low on trust and usage
eBay trusted, recommended and a great service
JD Williams: reliable
Boohoo/Boohoo Man: low awareness and usage
Littlewoods: well-known but lowest for recommendations
Very: good awareness and accessibility
APPENDIX – DATA SOURCES, ABBREVIATIONS AND SUPPORTING INFORMATION
Data sources
VAT
Abbreviations
Consumer research methodology

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