Two new research reports* have highlighted the long-term impact that we can expect not just on the economy but also on consumer behaviours – will the gravitation towards online shopping continue even when the pandemic is past and have our needs, wants and shopping habits changed permanently? How can retailers add not just comfort and safety to their shopping environment but new value to the shopping trip? Pamela Scott reviews the retail landscape.
Events influence behaviour but when life changing and global events reconfigure our lives beyond previous experience it changes our behaviour and habits in a very profound manner. Previously online shopping particularly in the UK was an expedient tool, a ‘means to an end’ from the comfort and convenience of our own home but with no personal involvement. But as 2020 progressed, enforced periods of working and/or living at home meant online shopping was no longer just about expediency. Some consumers are eager to have an online shopping experience which matched their pre-COVID shopping habits – the desire to shop is strong and with another lockdown online is our primary method for non-essential (and indeed essential) goods.
Of course, the shopping experience which involves touch, browsing and affirmation from friends and/or family is not yet a reality online and in a very real sense, never can be. And those stores and retail shops that can offer and promise a heightened shopping experience will definitely thrive post-lockdown and post-COVID. There will undoubtedly be a post-lockdown spike in high street and independent stores’ trading, especially with Christmas in the same month, but once this flattens the high street will never be the same: this is an accepted reality – what is more uncertain is what percentage of sales will be only online in 2021 and beyond. Some players in the retail industry who have both a substantial presence in bricks and mortar and online report that from a base of around 10% of sales being online, the split now is more like 50/50! E-commerce in some cases is no longer the add-on convenient extra but a major force in their sales and therein a major determinant of the way that retail business will develop.
According to Euromonitor 73% of global retailers believe that the shift to online sales will be a permanent one and larger operators are diverting resources into new methods of delivery as those costs have risen sharply. An emerging trend is turning bricks and mortar stores into delivery service hubs and fulfilment centres.
What is certain is that COVID-19 has accelerated trends that were already in motion and has changed the way that companies aim to serve their shoppers. Brands that are working in the non-essential sector are faced with new challenges in making themselves relevant to consumers when there is no ‘shop window’ or third party retail endorsement of their brand and products. The skill sets required by employees have altered dramatically – what used to be called the ‘backroom’ of any business (customer care and service consultants, digital and e-commerce developers and engineers…) are now in the spotlight as the curators of a successful retail business.
The first lockdown resulted in some shops never re-opening and the second may see some other casualties. However smaller enterprises who have had previously small online transactional operations (if any at all) have been quick to react offering Facebook shops, home delivery within a certain locality on same day or next day with the personal touch that cannot presently be emulated online.
And what is interesting at all levels is that the percentage of returns on clothing and non-essential shopping has reduced dramatically. For those consumers who have kept their job with the help of the furlough scheme or in fact have been working remotely throughout there are new purchasing patterns. There is less spending on entertainment, eating out, travelling and holidays and much more time to think and consider the type and scale of purchases. Will consumers go back to a spending level pre-COVID (taking Christmas out of the equation)? What is a definite trend is that many consumers are taking time to make much more considered purchases, researching more and taking other things into account such as sustainability and the provenance of any garments. Once the decision is made, these consumers are much less likely to return any item.
What is certain to be an issue now and in forthcoming months is the level (or lack) of supply. By necessity, production of clothing across the world slowed or was put on hold for some considerable time and although demand may also have slowed, there is an obvious gap opening up which will be felt acutely during the first half of 2021. Larger operators will be looking at their retail patterns to see where available resources should best be applied to continue demand which will increase.
Another trend which may be here to stay is the engagement of a different demographic into online shopping. The younger generation (Millennials, Generation Z) are all conversant with shopping online and from their mobile phones but the crisis has converted ‘older’ consumers (50+) – a great many of whom had never shopped online before.
What should be seen as encouraging looking towards 2021 is that 50% of global consumers feel safer in standalone stores in 2020 (compared to just 10% who prefer shopping centres). Likewise, the element of ‘discovery’ shopping for consumers cannot be replicated online. To be frank, online shopping is simply not exciting (the delivery more so) – it is still largely a transactional process, not a shopping event. If anything the ability to buy everything online has accelerated those smaller operators to focus on the personal service which is two-way, engaging and friendly. And of course nowhere is this seen more clearly than in the intimate apparel sector.
Whereas big clothing operators can look to creating touchless shopping experiences in the future when in store (mobile apps, wristbands or tablets that record the consumer’s purchases) for independent stores the personal service element is essential. Advice and encouragement given by staff face to face with customer cannot be emulated. However even smaller operations now know that they must strengthen digital communication with their customers to ensure the long term health of their bricks and mortar operation. Similarly, there are increases in email, messaging and live chat communication, live streaming – online bra fitting is just one example of this.
Above all, retail stores are the hub of their local communities – a space for interaction, conversation and human contact. And for sure much of this retail space will end up serving a number of purposes – click and collect point, delivery hub – the space has to be employed somehow as frankly the footfall through much of the UK’s retail space does not justify the cost to the owner. Optimism seems a little way off just yet but independent shops and stores are indeed uniquely placed to capitalise on the desire to enjoy shopping and spending money – online has not managed to replicate the joy of face to face transactions in discovering something new and exciting, the good feeling of consumers supporting their local retailers and enabling them to keep afloat, the personal fitting service from an owner genuinely experienced and enthusiastic about giving the customer a first-class shopping experience. When combined with small business owners adding a new skill set during lockdowns (social media, online fitting, Instagram and Facebook…) the customer has never had better service!
*Retail Innovation in 2020: What’s here to stay? (Euromonitor International) & How customer service in retail has changed forever (Zendesk Report with Retail Gazette)
