The proportion of money spent online has risen 25 per cent since
the start of the pandemic, new analysis has revealed.
During lockdown, online shopping peaked at 35 per cent of
transactions as consumers spent an average of £21 online on
several days during June.
Meanwhile, offline spending fell 50 per cent, from a daily
average of £80 per shopper at the start of the year to an average
of £40 in May.
Online spending fell back to 28 per cent of total consumption by
August as COVID-19 restrictions eased and the Government
encouraged people to spend money outside the home, including the
introduction of its flagship Eat Out to Help Out scheme.
However, that remained a substantial increase on the 19 per cent
of money spent online in January.
Dr Neil
Stewart, Professor of Behavioural Science at Warwick Business
School, said: “Online spending naturally became a bigger share of
UK consumption during lockdown, when shops were closed and people
could not leave their homes to spend money.
“Offline spending has risen since restrictions eased, but it
remains well below pre-pandemic levels. There is early evidence
of a ‘new normal’ in which the share of money spent online is
roughly 25 per cent higher than it was before the pandemic.
“If that continues, it could obviously have serious implications
for high street businesses as they try to recover from the damage
caused by the pandemic.”
The analysis by experts at Warwick Business School, the
University of Nottingham, and London Business School, was
published by the Economics Observatory.
It was carried out using anonymised data shared by Money
Dashboard to help understand changes in spending behaviour
during lockdown.
The amount people spent on food away from home fell 90 per cent
during lockdown with a slow recovery in July, which accelerated
in August with the introduction of Eat Out to Help Out.
But total spending took longer to recover, with many shoppers
reducing their outgoings in the wake of the economic shock caused
by the pandemic.
Consumer spending fell from an average of £100 per day in early
January to £60 per day in May and only recovered to an average of
£70 per day by August. The biggest decrease was in offline
spending.
Dr Chris Firth, a research fellow at Warwick Business School,
said: “Some forms of consumption cannot easily move online. You
can’t have a virtual haircut and you can’t eat out in a
restaurant online, though takeaway food is a partial substitute.
“However, our findings support suggestions that the gradual shift
towards online spending has been rapidly accelerated in just a
few months by pandemic.
“Significantly, our figures were taken from Money Dashboard
users, who were already more likely to spend a large share of
their money online.
“Therefore, the move to online spending may have been even more
pronounced among shoppers who previously preferred to visit the
high street more, but were unable to do so during lockdown.”
ENDS
The analysis and graphs showing the change in spending habits
were published by the Economics Observatory in an article, Might
coronavirus bring a lasting shift to online
spending?
