With online retailers heading into a very important quarter in terms of revenues, new research shows that online retail sales in the first half of 2022 were down by around 28% when compared to 2021.
However, the “On the Money” research by the Dublin-based agency Wolfgang Digital shows that online retail sales are up 121% on those achieved in the first half of 2019.
“This slowdown is likely to be a direct result of the harsh lockdown restrictions imposed for much of H1 2021 versus the removal of all restrictions in February 2022. Put simply, this year online shopping wasn’t the only option available to people,” says the report’s authors Brendan Almack, managing director and Beth Quigley, head of growth with Wolfgang.
According to the agency, the number of retailers turning over €1m in H1 was also up by 45% on the same period in 2019.
“Another good benchmark is to compare e-commerce growth since 2019 and the data reveals that -in spite of a slowdown in 2022- e-commerce revenue is still up by 121% versus the same period in 2019. That represents 40% average annual growth since 2019, which is an acceleration from the 32% seen from 2017 to 2019,” the report notes.
“So, although 2022 represents a slow-down in growth, the last 3-year period has given rise to a net acceleration in e-commerce growth,” the authors add.
The latest “On the Money” report also notes that “people are more likely to buy online now and website conversion rates are up by 47% when compared to before the pandemic in 2019.
“The website conversion rate increase over this time of 47% (from 1.46% to 2.14%) suggests a change in consumer behavior that has stuck. That is, Irish people now have an even higher propensity to shop online,” they add.
In terms of what is driving online sales, the authors point out that paid media is the biggest growth driver. “During the pandemic e-commerce retailers turned to paid media to help immediately capitalize on growing demand. Paid search and paid social traffic increased by 73% and 69% respectively compared to 2019. Within our dataset we also identified a direct correlation between paid media investment and revenue growth since 2019,” the authors note.
To view a full copy of the latest Wolfgang Digital “On the Money” report click HERE