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Exploring the new retail landscape

From fighting over toilet rolls to shopping local: read about the headline developments in retail 2020, there are many reasons to be optimistic as businesses align to a new market reality.


Exploring the new retail landscape


We can all sense that the world of retail has changed in 2020. Viral footage of people fighting over toilet rolls was the first clue. Then came dislocated supply chains as stockpiling came and went, to be replaced by shops re-opening and concerns around personal safety.

Ever resilient, shoppers have quickly adapted to the on-going situation. Yet trading conditions remain challenging: 34% of UK retailers in the food, fashion, and health & beauty categories stated in May that the negative impact caused by COVID would be ‘significant’. 

There’s also been a noticeable change in consumer behaviour, particularly after temporary COVID measures evolved into something more substantial – with two trends emerging in quick succession: the leap to online and ‘loving local'

 

The leap to online

Leap may actually be an understatement, as recent statistics bear witness:

Not that it takes a seasoned retail analysts to convey meaning from these numbers: with more people at home and not wanting to leave, the basic essentials have needed to come to them. And being ‘stuck inside’ is also the ideal time to embrace long put-off DIY projects and new hobbies.

surge in eCommerce

 

Exploring the new retail landscape

We can all sense that the world of retail has changed in 2020. Viral footage of people fighting over toilet rolls was the first clue. Then came dislocated supply chains as stockpiling came and went, to be replaced by shops re-opening and concerns around personal safety.

Ever resilient, shoppers have quickly adapted to the on-going situation. Yet trading conditions remain challenging: 34% of UK retailers in the food, fashion, and health & beauty categories stated in May that the negative impact caused by COVID would be ‘significant’. 

There’s also been a noticeable change in consumer behaviour, particularly after temporary COVID measures evolved into something more substantial – with two trends emerging in quick succession: the leap to online and ‘loving local'

 

Loving local

Lockdowns and concerns over travel have certainly made the world feel like a smaller place. Ambitions have been scaled back with people exploring more local destinations, and they love what they’re finding.

In fact small independent stores, able to offer a more social, personal touch to any interaction, are receiving a number of highly positive signals:

Shopper info

 

Getting busy

Then there’s the retail industry’s response, which has been heart-warmingly impressive. Putting our reputation as a ‘nation of shopkeepers’ to the test, over 85,000 businesses have launched online stores inside 4 months.

This is transformation with a capital ‘T’. Yet consumers have clearly liked what they’ve seen, especially during lockdown:

The question now of course is whether such statistics do indeed point to a ‘new normal’, or whether such behaviour is simply a temporary reaction to an unprecedented situation. Only time will tell.

 

Growth of new payment channels

Finally, there comes the payments angle to ecommerce that’s also seen a significant shift. Clearly a big driver has been the avoidance of bank notes, which is brought home by news that cash withdrawals were down over 60% during lockdown.

A 17% year-on-year growth in PayPal accounts also points to changes in buying patterns. This is an important point as it emphasises how the growing maturity of ecommerce has to be backed up by convenient and secure payment systems:

  • 49% of consumers say contactless payments would encourage them to shop in store

  • 68% will actively seek to use card or contactless payments post-pandemic

Summing up

With recent events we’ve seen winners and losers, challenges and opportunities. Found within the statistics however are many reasons to be optimistic, and to be confident of a future that’s already rewarding those prepared to adapt and innovate.

 

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