E-commerce sales grew 46% YoY in 2020 – how should supply chains be reacting?

As the world starts to wake up from its deep slumber and takes a big stretch, the retail industry is waiting on tenterhooks to see just how customers are going to respond to their new-found freedoms. E-commerce accounted for 20% of all retail purchases in 2020, growing by 46% YOY, and the sales haven’t slowed down since entering 2021. February alone saw sales up c. 70% YOY across multiple sectors, with electricals and homeware at the forefront of customers minds, as well as alcohol. But were these high sales solely due to the lockdown, or have consumer habits changed indefinitely? Is this really the ‘new-normal’, or will we fall back into our old ways again? And with the ever-growing advancement in technology, where should retailers implement their exciting and innovative ideas? With e-commerce predicted to maintain growth, it seems obvious where experts believe the priority lies, but maybe retailers should also focus on digital in-store capabilities, just in case we remember the thrill of actual, physical retail therapy.

In the same vein, customers are changing which categories they shop into. For example, personal care has undoubtedly gained importance since the breakout of Covid-19 and the sales evidently reflect this mindset. Combined with the continuous fluctuation of sales due to constantly being pulled in and out of lockdowns, retailers are finding it increasingly difficult to forecast effectively. This has frustrating repercussions for the whole supply chain and customers are the ones who ultimately lose out when availability suffers.

Whatever the outcome, supply chain leaders will certainly need to focus on their forecasting capabilities to ensure they have the tools in place to deal with the continued unpredictable and fluctuating pattern of demand. The Capgemini Research Institute has recently produced a report around the impact of these new and challenging times on our supply chains so stay tuned for the next instalment of blogs around this topic!

Rosie Burns

Consultant, Retail Supply Chain

Rosie is a Consultant with over 5 years’ experience working within the UK Retail industry across Grocery, Fashion and GM. She specialises in Supply Chain and enjoys working on projects that puts customers at the heart of the business.