It now seems certain that the death toll from Covid-19 will soon reach one million. This terrible loss of life has gone hand-in-hand with unprecedented levels of change and disruption affecting all parts of the world and all aspects of the global economy. Many millions of jobs have been lost and entire business sectors such as the performing arts, travel, hospitality and tourism have been rocked to their very core.
In the retail space, the effects of the pandemic have been nothing short of dramatic.
We’re living through an ecommerce boom that has left some retailers, distributors and couriers gasping for breath as they try to keep up. Right along the supply chain, all the way to the companies who make boxes and packaging, the increase in demand is staggering.
This online shopping boom was triggered by lockdowns and closures that meant visiting a physical store was not an option. It hasn’t come to a halt since those stores reopened. Sure, there has been a little rebalancing of physical and virtual, but we are witnessing some lasting changes in customer behaviour.
Analysing and assessing these changes may help to reveal how new shopping trends may be taking shape and how savvy retailers can stay in tune with customers’ new expectations.
Forget the vocal minority who complain about wearing masks, most people want to protect themselves from the possibility of catching the virus. You might be surprised, but in July one survey in the US found that 72% of Americans think that wearing a face-covering should be compulsory.
What do you do if you want to attract young, vibrant customers into your store? You make it appeal to them, right? Well, the same goes for people who are concerned about their safety and the safety of others – they want stores to feel safe. That means plenty of space, maybe one-way footfall markers and compulsory masks. Maybe lots of hand-sanitizer too.
That safety-first outlook needs to extend to all customer touchpoints, all the way along the value chain, through to the end of the last mile, right to the customer’s door. The more information that can be provided about deliveries during the pandemic, the better. Those retailers who are able to tell the customer who the delivery driver is, when they will turn up, and what the doorstep protocols are, will be helping those customers stay safe by keeping them informed.
Do you remember the last big change in people’s grocery shopping behaviour? Shoppers were falling out of love with hypermarkets. They had grown bored of pushing a huge trolley round a soulless warehouse-like store once a week. Instead, they were enjoying an exciting new relationship with a different kind of shopping. It was all about convenience – popping out several times a week to a smaller, local store to get just a few things.
Well, that’s all changed.
Speaking to the New York Times, John Owen, an associate director for food and retail at the market analysis group Mintel, said: “People now go to the store with purpose. The number of trips went way down, and the size of the basket went way up in April.”
Planning and preparation are in. Impulse buying is out.
Research conducted in June by McKinsey found the number of people likely to visit a store three times a week or more had dropped from 19% to 10% because of the pandemic.
Staying loyal – not!
All around the world, in the early days of pandemic panic, there were shortages of many products; we all saw the footage of grown men fighting over toilet paper in supermarkets. Flour and yeast were impossible to find, and pasta became a scarce item too.
In the UK, the online grocery retailer Ocado stopped offering large items such as multi-packs of bottled water. This was, it said, to free up space in its vehicles for essential items. You may feel that a pack of 24 bottles of lemon-flavoured Perrier is one of life’s essentials, of course.
Shoppers found themselves without the products and brands they had been buying for years, some started shopping from retailers they had never visited before. Some of those who switched allegiance to an alternative brand won’t be coming back. Loyalty? That’s a first-world concern, my friend.
Shoppers who switched may stay that way (McKinsey)
Shoppers who switched may stay that way (McKinsey)
Faced with the need to buy whatever was available and to save money – many people were without regular work – many people have discovered new routines, new products, and new stores.
The same McKinsey research that looked at how frequently people shop, also asked people about the importance of brand loyalty – 63% of those who had switched to a store-brand replacement product (during the pandemic) think they’ll stick with it over the long-term.
Data from McKinsey shows the extent to which consumers have shifted their spending online and, the analysts say, there is reason to believe it’s a long-term switch – for some shoppers, at least: “Most Americans continue to believe that the impact of the crisis on their routines and personal finances will last beyond the next four months.”
There’s been an increase of around 10% in sales across many sectors. Even in those countries where ecommerce is well-established, it is likely the overall share of purchases will keep shifting online.
McKinsey: ‘Most categories have seen more than 10% growth in their online customer base’
For retailers without an established ecommerce offer, or those with old fashioned and inflexible logistics arms, this shift to online sales may feel like it’s come at the worst possible time. Any business late the ecommerce party is going to struggle to close the gap between what they would like to sell and what kind of experience customers now automatically expect. After all, with same-day and nominated-day services increasingly available, along with the ability to make changes on-the-fly, customers are pretty spoiled by delivery services.
That’s the bad news.
The good news can be summed up in just one word – collaboration.
Strength in numbers
According to KPMG, delivery companies in China – such as Meituan-Dianping and Ele.me – have been partnering with retailers who lack a delivery network of their own. It’s an approach that offers both parties significant advantages.
It also demonstrates that even a business with little or no ecommerce presence can find ways to become a delivery hero. The last decade has seen an explosion in the number of startups offering delivery, ecommerce platforms, customer communications mechanisms and so much more.
Not every startup manages to find its audience, sadly. Some will disappear without a trace. Others will find new and interesting ways to make their tools and technology relevant to new audiences. In many cases, they are reinventing themselves as B2B companies. That’s great news for the development of ecommerce ecosystems.
Keeping up with consumers has been one of the most exciting challenges of being in retail. When those consumers are reacting to one of the worst global health crises in modern times, it can be downright frustrating too. Few, outside the most experienced and successful large retail players, can hope to be able to solve these problems alone. But no one should be left feeling they have no chance of succeeding. Because there’s never been a better time, nor an easier one, to find willing business partners to collaborate with and carve out your own successful approach.