Back to the high street: but not in the way you might think
With the lockdown in the UK in the process of being relaxed and with many major European countries and some US states already in the process of ‘getting back to the new normal’, it is interesting to note how shopper habits have changed – but perhaps not in the way you might think.
Naturally, with physical stores – with the exception of grocery stores and pharmacies – shut for the best part of two months, there has naturally been a gravitation towards online retail.
And, while much of this has been out of necessity rather than desire, many shoppers will be more digital in the months and years ahead. But the changes are more subtle than just moving from one platform to another – what has changed is how shoppers shop based on circumstances, rather than desire.
It was already happening. Online retail was about a quarter to a third of the total retail spend before the pandemic, but it wasn’t that a third of shoppers were online, the rest in stores. Instead, shoppers were mixing and matching how and where they browsed and bought based on many factors – time, location, mood, device and so on.
The same is happening now under lockdown – albeit perhaps more markedly: visiting supermarkets for food as you can’t get a delivery slot and buying everything else online as the shops are shut.
However, as lockdown lifts and stores re-open, it is this ‘pick-n-mix’ approach to how consumers shop that will stick, with a larger online element than before, and it is this that retailers need to plan for.
Research backs in up. There have been countless studies over the past two months into how shopper behaviour will shift online for good post-lockdown and that stores are doomed. However, if you read between the lines, that isn’t true: what has changed is the balance between the channels and a growing acceptance among traditionally digitally-sceptical shoppers that online is actually quite useful.
Take for example research out this week by Blue Yonder. It surveyed 6,000 European adult consumers in April and 1,000 US adult consumers in both March and April and found that, yes, almost three quarters (74%) of consumers surveyed during April said they were doing more shopping online as opposed to in-store in response to COVID-19 – this has increased from 57% when the same research was carried out in March.
However, more than two-thirds (69%) of them also said that they were continuing to shop in-store for groceries despite the COVID-19 pandemic based on the April survey results.
In Europe, some two-thirds (64%) of shoppers who are spending more online say they will continue to do so once the crisis subsides, but only 19% said they would visit grocery stores less post lockdown than they did pre-lockdown and 27% said the same of non-grocery.
Europe: While shopping in-store will continue to play an important role in the post COVID-19 world, 19% said they would visit grocery stores less than they did before – a figure that jumps to 27% for non-grocery stores.
So what does this mean in practice for the industry as it comes out of lockdown? Well, the retail landscape is going to get a whole lot more competitive as retailers chase, in the short-term at least, a smaller number of shoppers dollars/euros/pounds. These shoppers will also be spreading themselves over the online and real-world retailers in a different way to before.
What is clear is that all retailers need to focus on online more than they did before. The omni-channel retailers are going to have to up their online game to compete with pureplays, while the pureplays are going to have to up their game to compete with each other too.
Turning stores into online fulfilment centres is one way to look at it, but that too will only be part of the mix. Making sure stock is available everywhere, delivering when the consumer wants it and catering to 24-hour shopping habits – remember many people will want to go shopping late or early to avoid everyone else for months to come – are all going to play into this.
What we need to know in the coming weeks is just what the ‘new shopper’ looks like: how online they are, how mobile they are and how store-drawn they are. The mix is likely to be very different from what is was before the pandemic – and it is likely to keep evolving as we all slowly get used to being around other people again. Let’s see what next week’s research brings.
