28 April 2021
Author: Mark Fraser
But what opportunities are there for brands to continue to keep consumers coming back to stores again and again for the rest of the year? And what can brands do to keep on top of new shopping trends that developed during lockdown?
Last summer, when non-essential retail reopened, research from Kantar showed that consumers spent £3.8b in the first week alone. That’s a staggering amount of spending in just one week, and with non-essential stores having been closed for so long this time, everyone expects that figure to be even bigger this time around.
We sat down with two of our Microsoft team - Account Manager Kevin Hook, and Training Lead, Greg Nichols, to discuss non-essential retail reopening and how brands can capitalise on the consumer surge.
Kevin Hook comments, “I think it’s been a mixed bag due to the limitations of stock and staff.
From a staff perspective, I think there are some retailers that are not as well prepared as others and I think they've been using caution to ensure that they've only got limited number of staff in store due to social distancing requirements. When stores have a large footprint in big retail outlets, it takes a vast number of staff to close stock or distribution gaps and I just don't think they've got the headcount there to do that.
And the second point is stock. Within the Technology and Consumer Electronics channel, there's a huge restraint on stock availability, not just across laptops and PCs but across all technology supply chains. So even though in store staff know about how to close distribution gaps and what they need to do from a compliance point of view, there are big limitations on stock right now, including for demo equipment too.
Greg Nichols added, “I agree. Certain brands and retailers are well prepared if you take it from a Covid secure point of view. They are much more prepared than following previous lockdowns. So, with regards to Perspex screens, laying out what the rules are for mask wearing, creating disposable mask areas for people to be able to pick up masks and put them on etc, retailers are more prepared than they were previously.
They are also prepared for queues. Take Primark for an example, there were queues from 5.30am on the morning the stores were due to open and they had laid out a queuing system where they had made hand sanitising areas and had put heaters out for people. So, they’re definitely prepared in that sense; they’re readying for a surge of people to come in.
But there are also some retailers that I know of who weren’t prepared stock wise.”
Kevin said, “People have been locked away for some time and they’ve been in a position where they’ve had to shop virtually for the last 12 months, but I do think consumers still want that white glove experience, they want that consultancy selling approach. They do want to speak to an industry expert face to face about validating their choices on what they want to purchase.
I think regardless of what non-essential item they want to buy, they want to confirm their selection criteria, and that goes particularly for retailers with a huge number of products available like technology brands, where there are lots of different products and operating systems etc to choose from.
We saw queues when stores reopened, and we know from our partners that it wasn’t just people who were looking to purchase new things who were in these queues; they also contained people who wanted to return items because their online self-selection didn’t work. They found that they didn’t purchase the right thing or that it wasn’t fit for purpose and they wanted to spend a little more and choose a different brand.
People are savvier when it comes to online shopping, so that’s not going to go away but there’s a place for retail stores that consumers want to go back to. I don’t ever see that going away. I think that brick and mortar retailers are potentially going be the place people go when they want information on items before they purchase.
We’ve seen a huge shift over the last 12 months where people were shopping virtually using 1 to 1 online shopping experiences and virtual product advisors across different retail platforms. We have also seen a shift of people moving away from that too, where the level of people going through to speak to virtual product advisor has massively dropped off in the last three to five months.
This shows that people do want to get back to retail, get hands on with products, confirm their choices and get that last piece of knowledge from an expert before they complete their transaction.”
Greg added, “Kevin and I spoke about this earlier on today and were both seen a large number of people taking back products to store because the online returns process isn’t as robust as it is in a store, where you can go in and swap the item for another one that you like, or one that fits your needs better.
It’s key for retailers to have an easy process where they can deal with their customers safely, but also let them know that they can still return to the store to shop for other items in future.”
Greg chimes in first, saying, “In our world, because we work in tech, it’s been easier for us to see some of these trends when it comes to things like a good working from home setup. People will continue to ensure their home setup is comfortable in case we go back into lockdown again or working from home becomes permanent. This means that investing in computing devices, monitors, desks etc, is something I think that will continue. Obviously, if people have invested in that already then, they're probaby not going to be re-shopping for the same items, but I think people are now going to be more aware and think, actually I need a set up that's not just going to get me through lockdown but that's going to be sustainable for work now.
People will continue to spend on subscription services too. Obviously a big one for us is Microsoft 365, but that goes for other kinds of subscription services too. Take Disney+ for example. They planned to hit 100m subscribers within five years and they’ve gone to just over 110m within the first year, so people are more willing to pay for these kinds of things monthly and in more bite sized chunks.
We also saw an increase in people buying devices for their kids going back to school, knowing that the government could make an announcement at any time to close things down. People have been putting more thought into their purchases to buy something that will last them or their families a little bit longer.
Kevin also added, “I echo that completely, and just to build on that last point is people bought devices to get them through kind of school schooling and I think a lot of people made uneducated choices on what they wanted to purchase. Even some of those devices which are now 6 to 12 months old are not fit for purpose anymore, so we’re seeing people coming back into the market to buy a device which will last a lot longer. Whether they’re buying it for secondary school work, GCSE activity or even the younger generation in primary school, parents are realising that entry level devices aren’t fitting their needs.
There are a lot of people, not new customers but existing customers, that are coming back to buy again and we need to make sure that they’re making their right choices for devices that will work to fit their needs now and into the future.
Because e-learning and virtual learning at schools is here to stay, everyone is going to have to commit to make sure they’ve got the right kit in their homes to support their children’s learning on an ongoing basis. People will always be thinking, at that back of their minds, what’s going to happen next? I’m not sure we’ll see a pandemic of this scale again, but if something did happen that put holds on travel and restricts certain sectors and areas again, people need to ensure that what they’ve invested in is fit for the future, particularly when it comes to bigger ticket items like PCs.”
Greg said, “For me it’s two S’s – Stock and Safety.
Stores need to prove that they’re safe in every capacity because there’s going to be a bunch of people who are still hesitant to be out there. Whilst vaccinations are still rolling out, there will be a percentage of the population who will not be vaccinated for whatever reason
Stores need to demonstrate how safe their environment will be, even if that comes down to just demonstrating cleanliness in stores by doing things like wiping down devices, touchscreens and surfaces regularly.
And stock because with online shopping we’ve been spoiled for choice. On Amazon, if I’m looking for something and it isn’t going to come within a day, I’ll look for an alternative. It’s the same with retail. If you go to a store and there’s no stock, you’ve lost that person. Yes, someone may be coming to a store to touch and feel something, but people are used to receiving purchases within a day or two, so brands need to make sure retailers have enough stock across the board.”
Kevin agreed, and added, “I also think consumers will want to go anywhere that excites them. If any brand wants to invest in out of store activity this summer, I think that could be quite big for them. Of course, like Greg said, there will still be hesitation around being in crowded spaces indoors, but I think brands who get behind outdoor theatre will do well.
We’ve done bus tours in the past, and we did pop up stores in various locations. I think those types of activities could be a big win for brands, particularly if they build campaigns around busy areas and events.
Festivals are another arena where brands can really shine. Many brands don’t activate in these spaces, but in any festival, or any outdoor event with a high volume of people coming through an environment which is not the norm, this could be really big for brands. Getting some kind of brand activation campaigns in these kinds of spaces, where consumers can get hands on, touch and experience these products outside of the retail environment could be really popular this summer.”
We’d like to thank Kevin and Greg for their time.
With summer approaching, consumers are not going to stop spending any time soon, so brands really need to think about their strategies for attracting consumers to their products, and they need to help retailers to do just that.
It’s an important question, and we’re here to help you get that strategy right. Book a consultation with one of our team to find out how we can help you sell more in non-essential retail this year. Don’t forget to follow us on LinkedIn for the rest of the month too, as we chat more about the reopening of non-essential retail, away from home and the on trade.