2020 Retail Trends: Underline the importance of ecommerce

28 Jan 2021|2 MIN READ

It has been a challenging year for retail, and Covid-related disruption is set to continue well into 2021.

Our retail trends report looks at how people searched in Q4 2020, which products they needed, and which retailers were best positioned to take advantage of extra search traffic.

At times during last year, and so far in January, online has been the only channel of choice for many retailers.

Taking into account the numbers of people shielding, or simply feeling less confident about physical shopping, online channels have proved to be more vital than ever before, for retailers and customers.

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ONS data shows that overall retail sales declined by 1.9% in the UK last year, compared with 2019. This represents the first annual drop in sales for almost a decade. By contrast, online sales increased by 32%.

image1 - ONS data

Essentially, a huge portion of the retail market has moved online. Indeed, only food stores and a few other select categories have remained open throughout the whole year. All other retail sectors have had to rely on their online channels for at least part of the year.

ONS data shows some of the key growth sectors during 2020. All sectors see higher growth than in previous years, with exceptional growth for food stores, and much lower growth rates for fashion.

Retail trends 2020

Retail trends follow similar patterns. Our report looks into search data from four key retail sectors, and we see growth in each.

Homeware search demand grew by 47.68% year on year.
Electricals grew by 39.2%.
Beauty grew by 23.15%.
Fashion grew by 7.63%.

The growth in each sector was mainly a reflection of how vital certain products were during different times of the year.

Fashion saw the lowest growth rates simply because clothing for going out and even for office work was simply not needed so much.

The subcategories within retail that did well were mainly things like loungewear and fitness gear which become more important.

Fashion retailers selling a more all-round range were better placed to adapt, while others may have struggled. Primark, which has steadfastly refused to trade online, predicts it may lose up to £1bn in sales in lockdowns continuing through to March 2020, which looks likely.

This chart illustrates the effects on search volume during 2020. Beauty searches (navy blue line) were higher overall, with steadier growth. We see two peaks, during lockdown 1, where products were needed to make up for the closure of hair salons, and up to Christmas, due to the gifting of beauty products.

For fashion (light blue) we see a huge drop in interest during the fist lockdown, though search volume does pick up in the latter half of the year.

Retail trends 2020 - Pi Datametrics market report

Image source: Pi Market Intelligence

Electricals (orange) saw huge growth during the year. Gaming consoles have been a popular search throughout the year, peaking higher in the run up to Christmas thanks in part to the launch of two major consoles, the PS5 and the new Xbox.

Earlier in the year electrical products like hair clippers and the fitbit were very popular, reflecting the needs of online shoppers at that time.

Most searched terms 2020 | Search volume | Google UK

Screenshot 2021-01-27 at 17.35.10

Retail trends: Homeware category

Of the sectors we look at in our report, homeware experienced the biggest growth in search interest year on year.

Garden and DIY products were the big growth area earlier in the year, as the lockdown and realisation that foreighn holidays were going to be difficult led people to invest in products to make the garden more enjoyable - hot tubs, fire pits, sun loungers etc.

In the latter half of the year, the furniture by room category grew, as people looked to make life more comfortable indoors, in preparation both for winter, and for another lockdown.

We saw huge increases in search volume for ‘Furniture’, and ‘Garden & DIY’ terms

Screenshot 2021-01-27 at 17.37.25

Image source: Pi Market Intelligence

Search terms reflect this, with mirrors, wallpapers, beds and sofas amongst the most popular product searches.

When compared with 2019, there are some clear differences in product searches

Screenshot 2021-01-27 at 17.38.10

For retailers in this sector, and most sectors, the key was to adapt to search demand and be able to create content and optimise to take advantage of the opportunities offered by this increase in searches.

For example, searches for hot tubs and sun loungers both grew by more than 300%. With the right SEO strategy in place alongside the right products, this was a huge opportunity for some retailers.

In the homeware sector, competition was tight between the top five retailers. Amazon, as a generalist, managed to take some search share of voice in this sector, but Argos emerged at the top of the leaderboard, as it stocks almost all of the popular products in this category.

Argos experienced increased sales during 2020 despite the closure of all of its stores for three months (many didn’t reopen even after the easing of lockdown in June). However, it did benefit from the ability to offer click and collect through Sainsbury’s stores.

The online performance landscape for Homeware during Q4

Screenshot 2021-01-27 at 17.40.00

Image source: Pi Market Leader Homeware leaderboard

In summary: what can we learn for 2021?

2021 has started with a lockdown and the closure of most retail stores which is likely to last through to March, perhaps longer.

For this reason, we can expect many of the search trends we see here to continue. Spring is likely to bring more demand for garden and DIY products for example, and fashion retailers may still experience difficulties.

There is not likely to be a point where everything is suddenly normal again, so we can expect some restrictions on physical retail to continue, and therefore online search demand will continue well in this year.

For retailers, this means SEO strategy is more important than it ever was. Almost every online retailer should be seeing increased search demand, the question is whether they have the right strategy in place to profit from this demand, optimising for key terms at the right times, and converting this search traffic into sales.

A good start is to learn from recent search trends, to see how the search landscape looks in your target sectors, and to have the content and SEO strategy ready to handle customer demand.