Whisper it, but there are some signs at the start of the new year that eCommerce might be making something of a comeback following a long period of stagnation. The below graph helps to illustrate just how long that period has been.

The x-axis, which is so vast and congested it can be difficult to read, starts in April 2021 where we were recording the final skewed weeks of lockdown-affected growth. Following that, the eCommerce market declined year-on-year (YoY) in each consecutive month for three and a half years (barring a handful of instances where growth was flat).

The right-hand side of the graph reveals a bit of a shift in fortunes though, with the IMRG Index – which tracks online sales from 220 retailers, based on an annual sample of £30bn – now recording five months of positive YoY growth running from September 2024 to January 2025 (and the first two weeks of February have been positive too, so it could well be six confirmed very soon).

So what is going on here, what is driving this change?

Retail ultimately is a game of demand. If there is strong demand for products in the category you serve, everything becomes easier – from marketing through to acquisition and conversion. If a retailer finds themselves selling products where the demand has dipped, convincing people to part with their hard-earned cash is obviously far more challenging.

Demand specifically can be influenced by a wide variety of factors such as the weather, celebrities and entertainment (characters in films wearing a certain style for example), but in this instance we need to consider whether a more general sense of demand is increasing, which would be linked to shopper confidence; ie, am I feeling flush enough to go and make a few non-essential purchases, splash out on an indulgence, treat myself?

It's fairly clear from the political and economic macro environment that there is plenty of instability and negativity. Inflation continues to be a problem, the cost of many items is higher than it was just a few years’ ago, so it doesn’t feel like demand is being stimulated by a boost to shopper confidence.

So what else could account for it? Is it that the range of available products has increased, or the number of channels through which people can engage with retailers has grown, or that evolving technology platforms are bringing efficiency to areas such as personalisation, conversion and retention?

You could make an argument that some or all of these are perhaps exerting some level of influence, but I suspect the primary factor is far more simple: eCommerce has just run out of declines for now.

Although the eCommerce market has undoubtedly been through a rough patch, the fact is that it still represents a vibrant and interesting industry with a bright future; eCommerce is not dying, it will not disappear, it’s just experiencing some growing pains and finding it is not immune to the difficult macro environment within which we find ourselves trading.

So, if that is the case, the positive has arrived on the back of a bit of a negative but, given the market conditions we’ve been working within over the past few years we’ll take it. It’s nice to have eCommerce back.