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.
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'
Leap may actually be an understatement, as recent statistics bear witness:
UK ecommerce sales are expected to reach £78.9 billion this year, up from £66.3 billion in 2019
Online grocery shopping increased by 91% in June alone
Home and leisure products were also in high demand, with online transactions up 200%
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.
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'
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:
These ‘small independents’ rang up 69% more sales in the 3 months to 20 June
81% of people planning a mini-break say they’ll be staying within the UK
Corner shops have also been recognised for their key role in local communities, with a 27% increase in positive perception
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:
52% of consumers say they increased online spending during that time
Retail sales jumped 3.4% in June compared to last year
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.
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
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.
From fighting over toilet rolls to shopping local: find out about headline developments in retail 2020, there are many reasons to be optimistic as businesses align to a new market reality.
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