Retail has had a shakedown in recent months and lockdown has forced retailers to change their business models or face closure.
We’ve seen billionaire retailers like Sir Philip Green and Mike Ashley requesting rent cuts of up to 50% and, as time has marched on and retail sales plummeted, big retailers such as John Lewis have even been forced to face branch closures. In hospitality as well, recognisable high street names like Pizza Express have fallen victim to the pandemic paralysis.
So, is this the death of the high street as we know it? Not quite. Research has found that e-commerce sales have skyrocketed during lockdown; 40% of consumers now state they have “increased or significantly increased” online purchasing, “rising to 48% for households with children and millennial households.”
The pandemic is forcing the hands of retailers. This is the time sandbox experiments will need investment in terms of finance and confidence to push them into retail reality. The future of retail is digital, yet often times, the high street seems to be living in the past. Within the next decade or two, retailers need to realise this otherwise they face becoming dinosaurs like the Woolworths and Blockbusters of this world.
The age of e-commerce
Lockdown has not just encouraged the switch from physical to digital retail, it has implored it. This is truly the age of e-commerce; we’ve experienced a sharp rise in online shopping as a safe and secure way to explore brands and buy goods remotely. Research has found that e-commerce sales have skyrocketed during lockdown; 40% of consumers have increased online purchasing, rising to 48% for households with children and millennial households.
So, we know the popularity of e-commerce is likely here to stay, but retailers are also exploring how to coax consumers back into brick-and-mortar stores as restrictions ease across the country – how can retailers reassure the public and reinvent the shopping experience?
Ten years ago, the name of the game was developing a strong web brand, now it’s all about developing an intuitive app offering. With the emphasis on online and digital solutions, brands need to have well-designed apps linked to e-commerce that allow users to complete their buying journey from the palm of their hand.
As we come out of lockdown, the top current consumer apprehension is around health and safety. We’re seeing a lot of household names combatting this issue through providing services that minimise social contact. One of lockdown’s winners has been Ocado, the online supermarket, which has had stratospheric success during the lockdown with its tech offerings and delivery service.
Sustainability is top priority
For many retailers, it’s all or nothing. Consumers have high demands and their pounds are more valuable than ever.
It’s critical to know what goes on in consumer minds. When speaking to 2,000 Brits over the lockdown period, we found out that two in three consumers plan on making more eco-conscious choices to lead a more sustainable life.
Two in five (41%) would choose more eco-friendly food options and over a third (36%) would choose more sustainable clothing options. Fast fashion has always been a bugbear for many, but are frustrations now reaching boiling point? It definitely seems so with nearly half of Brits (46%) happy to pay a premium when it comes to sustainable products.
It is clear to see that consumers are on a journey towards more sustainable lifestyles. Retailers are expected to meet consumer demands for sustainability that goes beyond just offering eco-conscious products. Brands need to make a move on their own sustainably journeys. Retailers must start reassessing their supply chains with a focus on well-known accreditations like Fairtrade and the Global Recycling Standard and vocalise their sustainability journeys to demonstrate to consumers a commitment to going green; this helps nurture loyalty and drive sales.
Leading with innovation
With increasing emphasis on physical hygiene and safety, we are likely to see novel shopping experiences in the coming months.
AI will be critical in providing safer, touch-free options and on the shop floor this can take many forms. Some examples include interactive AI-enabled mirrors for trying on different types of clothing and even robotic personal shoppers in-store that can provide information about new product ranges at the touch of a button.
One particularly exciting use for AI that that could be a game-changer in today’s shopping environment comes in the form of AR mannequins. These solutions offer the perfect blend of safety and excitement. Pairing these AR solutions with devices such as tablets and smartphones through simple QR code systems allows users to try products and explore their features from every angle from their own devices, without needing to touch anything. Retailers can even link up the AR experience to their ecommerce sites so consumers can purchase items on the spot.
We are also seeing innovative solutions in product development. Anti-microbial products, for example, look to be growing in popularity. Many office works will be looking to purchase anti-microbial and anti-bacterial products to keep their desks safe and reduce the danger of cross-contamination as much as possible – retailers need to cater to this if they want to remain relevant.
Even though the purse strings are tight for many retailers at the moment, not investing in diversifying, innovating and making sustainable choices can be the final nail in the coffin for many retailers.
Store footfall is still at a low point – footfall was down 42% in July 2020 from the base level, but that’s still an uptick from the 62.6% decline recorded in the previous month – people are returning and retailers should look to maximise these opportunities.
The old adage ‘You need to spend money to make money’ is key; brands need to set wheels in motion for this now, not just say they will in the next decade or two, otherwise they face biting the dust.