Will UK Digital Retailers Deliver (Literally) This Holiday Season?

The UK is something of a global leader when it comes to retail ecommerce. This year, only China will trump the UK in ecommerce sales as a proportion of total retail sales (41.2% versus 30.9%, respectively). The UK’s fulfillment and delivery infrastructure is, as one would expect, quite mature.

“The UK seems primed for a busier-than-usual holiday season, and the stress test of the lockdown will stand fulfillment and delivery firms in good stead to weather the storm of the 16.7% increase in holiday ecommerce sales that we’re expecting,” said Bill Fisher, eMarketer senior analyst at Insider Intelligence and author of our latest report, “UK Holiday Season Shopping 2020.”

Concerns about receiving orders in time for Christmas may have driven some of this early “loading” of holiday season shopping. So, too, might have consumers’ financial and economic concerns, fueled by the impending conclusion of the Coronavirus Job Retention Scheme and the continuing threat of redundancies.

Whatever the core reason, a third pandemic effect has shifted shopping earlier in the year. The “Black Friday in July,” aka Amazon Prime Day, was pushed back this year to October 13–14, moving the event much closer to the traditional holiday shopping period.

We expect global Prime Day retail ecommerce sales to have hit £7.76 billion ($9.91 billion) in 2020, with non-US ecommerce sales accounting for £2.93 billion ($3.74 billion).

Even if the UK constituted a significant portion of the non-US Prime Day sales, that portion would, nonetheless, pale in comparison with the UK holiday season total of £28.51 billion ($36.39 billion). We project, however, that this year’s worldwide Prime Day sales were substantially up from 2019, and the event’s sales growth has provided impetus for other retailers to try to keep up.

Suffice it to say, this front-loading of shopping behavior will slightly dampen holiday season sales, despite the acceleration in holiday ecommerce growth. Retail ecommerce sales from November to December will decrease as a percentage of Q4 2020 sales, from 75.2% last year to 70.7% this year.

The impact of the lockdown earlier in the year will be even more pronounced. Holiday season ecommerce sales as a proportion of full-year sales will fall to 20.2% this year, down from 23.3% in 2019, and will represent its lowest level since we started tracking by this measure in 2010. Yet, none of this should detract from the fact that Black Friday and Cyber Monday will still be important digital shopping holidays in the UK this year. The 16.7% growth in holiday ecommerce sales will be fueled by cost-conscious UK consumers looking for discounts. Still, there are clear signs that these US-imported holiday shopping events are becoming less appealing across the UK, and the sales boost they offer will be less keenly felt in 2020 than in years past.

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