19 May 2020
Author: Linzi McGuire
As the Covid-19 pandemic progresses, how the nation works, shops, banks, exercises, entertain themselves, socialises, accesses healthcare services, and even worships, moves towards an increasingly digital life. And they’re doing it all from home. So, what does this mean for the future of brick and mortar outlets vs ecommerce?
With restrictions in place, consumer demand has moved to where there is supply and for now that means online. The consumer’s “new normal” will be a result of how they’ve lived, shopped and worked during lockdown.
The shift from the offline to the digital world has been nothing short of dramatic. But what’s interesting is that this is true even where stores are still open, for example in grocery, which indicates that ecommerce is the new normal for many.
The longer social distancing and closed outlets remain, the more likely it is that consumers will make online part of their daily routines into the future. Afterall, by now they have already set up accounts with multiple sites who can fulfil their needs digitally and gained experience of how they work on an ongoing basis.
Covid-19 has been the catalyst to an ecommerce explosion, years earlier than predicted, but has consumer spend shifted or remained steady as buying behaviour shifts to online?
We’re hearing reports that although consumers may have moved a high proportion of their activities online, their level of spend has not remained as high, as fears and uncertainties over finances and job security mount.
As a high proportion of consumers shift their spending from what’s “nice to have” to what they perceive as “essential” for daily life, this indicates that outlets* who provide consumers with essentials in the new world will thrive as consumers transition back to brick and mortar in time.
Google announced that Google Search has never seen as many searches for a single topic continue over a sustained period as is happening now with “Covid-19”. Many searches are for news about what’s happening in local areas, such as government updates or the latest on testing, but new search terms have also climbed the ranks.
When it comes to barely surviving, Google reported that search volumes on travel, tourism, live entertainment and in-person events are unsurprisingly, all down. Additionally, industries that previously saw sales coming from both from bricks and mortar and online stores like health and beauty have pivoted quite dramatically. Harper’s Bazaar reports that while sales in beauty shifted from make-up to skincare, it’s not at the same volumes they were used to pre-pandemic. However, online sales in bath and body have increased as much as 52% as we treat ourselves in new ways during lockdown.
The industries that have seen a spike in demand during lockdown include grocery, personal care and home & garden including DIY. Kantar reported that 12.5 million households planned a DIY project during the lockdown and search data makes clear that B&Q has been the winner, as sales soar in online, click and collect and in-store, since reopening.
Finally, Google reports that the volume of searches for “stores open near me” or similar, has shot through the roof. This indicates that although the percentage of people shopping online has dramatically increased, the desire to get back to bricks and mortar remains. This data tells us that hyperlocal shopping is the newest trend in commerce.
Right now, we are living in an online world, whether by choice or necessity. The longer social distancing and outlet closures remain in place, the harder it may be for consumers to break many of the digital habits they’ve mastered and return to the offline world in the same way they shopped before. However, the rise in “near me” search volumes indicates that bricks and mortar retail is not dead. So, what is the future?
It is likely that consumers will continue online shopping in the short term and continue new skills and habits, but as the possibility of stores reopening becomes closer, it appears the thirst for bricks and mortar stores remains.
In the new world consumers will spend wherever they feel comfortable transacting and they’ll physically distance themselves from where they perceive to be risks. This means that new considerations exist when deciding how and when to re-enter the physical world to conduct business or engage in commerce, and brands and stores should be aware of this, while also finding ways to bridge the gap between the online and offline consumer journey.
Jill Ross, CEO comments, “Covid-19 will be an inflection point for online shopping. To capture the online demand, we’ve seen businesses accelerate changes that might previously have taken years, into just a few months. Post covid, there will be a new demographic of online shopper, and channel lines will be redrawn. How businesses work to retain this spend and loyalty from their new online consumer base will be key. At the same time, physical stores still have a major role to play. The future will belong to those retailers who are able to deliver an integrated shopper experience, seamlessly blending offline and online to deliver a tailored and engaging experience, wherever and whenever a consumer chooses to shop”
*includes stores, brands, healthcare providers, health and wellbeing suppliers or places of worship.
ABOUT THE EXPERT:
For more information on Jill Ross, CEO please visit her LinkedIn page.