How will COVID-19 change retail?
There is no denying that the Covid-19 global pandemic has changed all facets of life for people across the globe. Healthcare, education, and government have all had to react quickly and in unique ways to protect and serve the public. The retail sector has faced myriad challenges and is now striving to reimagine and redesign their offerings to attract business and stay in the black.
While we are still currently mired in the pandemic, we can look to the long term and make predictions about what are temporary measures, and what are long-lasting consumer behaviour changes.
Long-lasting consumer behaviour changes
While some consumers are comfortable going ‘back to normal’ when this crisis has passed, certain changes in attitudes and behaviours will likely become the new normal.
A shift to online shopping
At the height of the lockdown, the only way to get most consumer items was to shop online. This seems to have made a significant impact on consumer behaviour. According to data from ChannelAdvisor and research firm Dynata, two in five (42%) British consumers plan to do the majority of their shopping online, even when lockdown restrictions end.
The lucrative younger consumer demographic plans to shop almost exclusively online, with 59% of those aged 26-35 saying that they prefer to buy both luxury and essential goods online.
Jon Maury, EMEA MD at ChannelAdvisor, says, “Lockdown has driven many consumers online in search of essential and luxury goods, and there are signs that many will continue shopping online, particularly older consumers who tend to have more disposable income.”
More click-and-collect orders
Many customers are reluctant to enter enclosed spaces in order to browse and shop. However, with difficulties securing home delivery slots for essentials like groceries and toiletries, many have turned to click-and-collect to secure the items they need without having to step inside the shop. This is likely to continue for the foreseeable future.
An emphasis on bulk buying and building a larder
Our grandparents suffered through the Great Depression, World War II, and polio pandemics of the ‘50s, and they knew the value of a penny. They stocked up when staples were on sale, planted gardens, canned preserves, and built up an admirable larder of non-perishable goods.
More and more people are doing the same now, scared by food shortages (who can forget the toilet paper debacle?) and uncertainty. People are attracted to bulk buy offers and multi-buy discounts in order to build their own larders.
How will retail businesses adapt to social distancing measures?
Based on the consumer demands listed above and the realities of social distancing and government restrictions, retail businesses will continue to change their business models to adapt and thrive even under duress.
- Malls/shopping centres will change drastically - Malls, the ultimate retail palaces, will continue to change and evolve to try to match consumer demand. Even before the Covid-19 pandemic, brick and mortar shopping centres were struggling to compete with online shopping. You’ll likely see fewer opportunities for browsing and customer care (such as children’s play areas), and more attempts to make customers feel safe, such as plexiglass barriers. There is a lot of uncertainty around malls, with some doubting that they will survive.
- Direct to consumer groceries from restaurant suppliers will remain a trend - During the Covid-19 pandemic, luxury wholesalers of food and alcohol have pivoted their sales from focusing on restaurants and hotels to selling directly to the consumer. Welsh lobsters, Midlands free-range duck, and Cornish vegetables can now all be purchased direct from suppliers and prepared at home. Now that consumers know just how much they were paying for the mark-up in the middle, will they be happy to go back?
- Contactless payments will become the norm - Contactless payments are becoming more and more popular. In addition to the ‘tap’ method of payment with debit and credit cards, more businesses are developing apps on which customers can pay for transactions. Apple Pay and Android Pay are also both increasing in popularity, taking all of the unnecessary contact out of the transaction.
- Markings and signage will be used to support 1m apart guidelines - Now that Boris Johnson has announced that the 2 metre social distancing guidelines will be reduced to an ambiguous ‘1 metre plus,’ businesses will need to rebrand their posters and signage yet again. What is certain is that some form of social distancing will be the norm for at least the next year. Do you have the right social distancing signs to keep people safe?
- Shorter opening hours to restock safely - Many businesses have shortened their retail hours to prevent the need for restocking during opening hours. Staff take up space when restocking shelves, preventing social distancing and putting themselves in harm’s way. This (and/or hiring a graveyard shift to stock overnight) is likely to continue. While it may mean fewer hours in which customers can shop and spend money, consumers may be more compelled to shop if they feel safe when in the store.
- Shops will limit the number of shoppers allowed inside at one time - We have already seen this throughout the lockdown but expect to see limits of the number of shoppers to continue until there is a vaccine or antiviral treatment. Of course, this means that fewer shoppers will pop in for an impulse buy, and some might be put off the High Street completely. However, as with the shorter hours, this measure might make people feel safe and comfortable heading indoors to browse and shop.
- Screens will be placed between cashiers and customers to protect staff - If you have been out in the High Street, you have likely seen Perspex or glass barriers between the cashiers and the customers. Ideally, this will prevent droplets from transmitting between people; this measure will likely be in place until a vaccine or treatment is available.
- Self-checkouts will become more popular than ever - While it seems that the threat of surfaces was initially overstated, people are still wary of use self-checkouts. However, it now appears that minimising human contact is the best choice. Ringing your own shopping through allows you to maintain your distance and reduces the chances of transmission. Of course, consumers and retailers alike will need to take measures to use self-checkouts safely, such as using sanitiser and disinfectant wipes.
- Automation will become commonplace in warehouses and for stocking - Automation can be used to mitigate human contact, which will be especially useful in meat processing plants, warehouses, and large grocery stores. Wherever possible, smart robots and/or drones will be used to navigate the floor, identify restocking needs, collect and pack orders, and perhaps even clean and sanitise surfaces. While an increase in automation could mean the redundancy of certain jobs, it will keep people safe and boost consumer confidence.
Is COVID-19 going to change retail forever?
Most medical experts posit that the world will remain in a state of limbo until a vaccine is developed. As a result, lockdowns and social distancing measures will be in effect for the foreseeable future. What does seem inevitable is that retail will be forced to continue to shift and change to survive. As many people now have less discretionary income to spend on toys, electronics, and clothing, will many retailers survive, let alone thrive?
Certain categories are doing a brisk trade, with the cosmetics sector seeing a 140% rise in the first week of April. Similarly, electronics rose 90%, and home and garden rose 70%. It should also come as no surprise that food and alcohol sales have increased, with many brands investing in ‘DIY’ kits and ways to bring the restaurant experience into customers’ homes.
Only time will tell what will happen as the pandemic continues to spread, and fears of second and third waves increase. The only thing for sure is that retail will have to continuously adapt to stay relevant and financially viable.
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