Online retail, sponsorship, rebranding: 5 interesting stats to start your week

Online retail sales growth soars to 10-year high

Online retail sales growth surged to a 10-year high in April of 23.8% year on year as lockdown caused a “seismic shift” in purchasing patterns.

The spike in sales was driven by multichannel retailers, which saw online sales rise by 35% versus a more modest increase of 8.3% for online-only retailers.

Electrical sales rose by 102%, gardening by 94.4% and beauty by 82%. However, clothing sales were down 23.8% with footwear (-31.1%) and menswear (-33.5%) performing particularly badly.

Source: IMRG Capgemini

Sponsorship revenues to fall by a third in 2020

Global sports sponsorship rights-fees will decline by 37% this year, from $46.1bn in 2019 to $28.9bn in 2020 as the Covid-19 pandemic hits the industry.

The decline includes a 45% decrease in spend by financial services companies. Financial services was the biggest investor in 2019, accounting for 27.3% (or $12.6bn) in total spend but is expected to spend just $6.92bn this year.

Automotive, the second biggest spender in 2019, is forecast to cut spend by 55% this year to $2.7bn, while technology companies will reduce spend by 18% to $2.55bn.

Source: Two Circles

Rebrands reduce acquisition risk in the long-term

Companies that are rebranded after they have been acquired see their performance reduced by 2.1% in the year after, compared to a 0.4% hit for unrebranded companies. This suggest in the short-term performance will be worse immediately after a rebrand as the company negotiates major business changes.

However, rebrands lead to a significantly reduced risk following an acquisition. Rebranded acquisitions experience much less dispersed returns of between -27% and +23%. For companies that are not rebranded, returns can be anywhere between -40% and +39%.

This means that in practice only 16% of rebranded acquisitions will see a business return of -27% or lower, whereas among companies that were not rebranded this number is as high as 25%.

Source: Brand Finance

Retail footfall plummets amid lockdown

Retail footfall plummeted by a record 84.7% year on year in the four weeks to 2 May as the impact of the lockdown was felt across the industry.

Footfall on high streets declined by 81.8%, while shopping centre footfall was down 87.8%. Retail parks performed slightly better, with footfall down 62.4% as the higher proportion of supermarkets sheltered them from the most severe impacts of the lockdown.

Source: BRC & ShopperTrak

Brands need to show their agencies ‘financial empathy’ to get the best results

Clients who exhibit financial empathy with their agencies will get better results from them.

Brands rated by their agencies as in the top 10% for their sensitivity to their agency’s finances achieved 16% better creative performance than those rated in the bottom 10%. Quality of staff allocated to a financially empathetic client improves by 21% compared to less considerate clients.

There is also improvement across other agency disciplines for clients that show empathy including digital (15.4%), media buying (11.5), media planning (11.2), strategy (15.6) and production (15.5%).

Source: Aprais