As the digital world has evolved, so too has the way we shop, and with more people now shopping online than ever before, the e-commerce sector has continued to go from strength to strength.
Over the past few years, e-commerce has played a leading role in the UK’s economy and internet sales have continued on a general upward growth trend. In fact, the value of e-commerce sales in the UK non-financial sector rose to a record £688 billion in 2018 – the largest annual growth recorded since records began in 2014 according to data from the Office of National Statistics (ONS).
A study by Smart Insights found that the top reasons for people shopping online were the ability to shop 24/7 and the ability to compare prices easily with consumers savvier than ever before. Even before having a global pandemic to contend with, high street stores have been struggling to compete with their online competitors.
This growth doesn’t just impact e-commerce businesses directly but has a positive ripple effect on related industries. As a result, the UK has seen an increased spend on technology and services needed to facilitate online and multichannel commerce. For example, research conducted by Mintel found that in 2018, courier and express delivery services sales increased by a record 12% to reach £12.6 billion.
The impact of COVID-19 on e-commerce
When the UK went into lockdown in March of this year, consumers were forced to shift their spending to online retailers and as a result, the e-commerce sector saw exponential growth.
Internet sales peaked in May, according to ONS data, with 32.8% of total retail sales taking place online. This won’t come as much of a surprise, with non-essential shops forced to close their physical stores, consumers had no other option than to turn to the internet.
However, when shops reopened in June and the economy began to reopen, our preference for online shopping remained. For example, in July internet sales accounted for 28.1% of retail sales, which to put it in perspective, is almost 7% higher than the previous record high seen in November 2019.
Whilst it’s fair to say that the spike in online shopping has now begun to settle, it’s clear that the pandemic has accelerated the shift in consumer behaviour, and many believe it’s a trend that is here to stay.
Those that had reservations about purchasing online before the pandemic have been forced to rethink their shopping habits. And with coronavirus rates rising and different forms of lockdowns implemented across the UK, many continue to see online shopping as the safer option.
Throughout this pandemic, many businesses have pivoted their models and taken their services online. It’s been a huge lifeline, not just for businesses owners but for the UK economy, which otherwise would have come to a standstill. The importance of e-commerce for the UK economy has never been greater than it is right now.
Taking your business online
A recent report from Growth Intelligence found that between February and July of this year, more than 85,000 businesses had launched online stores or joined online marketplaces like Amazon or eBay. The numbers represent the highest volume of new e-commerce offerings ever recorded over a four-month period.
Businesses across almost every sector adjusted to a new way of operating and this has provided a much-needed boost for UK PLC. So, whether you’re looking to take your business online, or want to invest in your online services – now is definitely the time to think digital.
With a Capify e-commerce loan, you could raise between £5,000-£500,000 to help fund your growth plans. Unlike traditional finance, our loan repayments are small and manageable to give you more flexibility.
If you want to find out more about the benefits of a Capify e-commerce business loan, then visit our e-commerce finance page here, or simply get in touch today.