5. Online bubble bursts
The Covid-19 e-commerce surge seems a long time ago now, doesn’t it?
UK online sales growth fell to -12% YoY in December, its lowest since March when the rate was still affected by Covid-19 lockdown comparisons.
That’s according to the latest IMRG Online Retail Index, which tracks online sales for 200 retailers.
This caps what IMRG labels “arguably the toughest year ever for online retail”, with growth for 2022 coming in at -10.5% YoY, by far the lowest growth ever recorded for a year and the first time it has been negative (the previous low was +2.7% YoY in 2021).
Growth online for the Black Friday week turned out to be flat, which was a bit better than expected and was out of sync with the low demand of the previous 10 months.
However this turned out to be due to volume being pulled forward, as was evident from the week following it; sales for w/c 27th November fell -7.3%, against a huge decline of -34% for the same week in 2021.
Disruption caused by Royal Mail postal strikes also saw a weak performance for w/c 18th December, as final delivery dates shifted earlier, with sales down -4.7%, and unable to build on the -22.4% decline for the same period last year.
6. Shoppers should be wary of using BNPL services amid wider social pressures
Buy now pay later (BNPL) firms had a very merry Christmas.
34% of UK shoppers have now used BNPL services to spread the cost of purchases, and thousands chose to use them for the first time over the 2022 festive season.
That’s according to research from Equifax, which reveals how the cost-of-living crisis and shifting shopping habits are influencing the use of high cost, short term credit.
Jayadeep Nair, Chief Product and Marketing Officer at Equifax UK, says: “BNPL has become a pervasive part of the shopping experience.”
“As with any form of credit, when shoppers use it responsibly it can be a great budgeting tool to help manage extra spending over the festive period.”
“As BNPL is a form of credit, it now appears within consumer credit reports, which can be viewed by lenders. This may impact lending decisions, therefore BNPL should be used with this in mind.”
“Shoppers do need to be wary of using BNPL to overstretch themselves especially if spending is being driven by wider social pressures.”