Why multichannel retail will be key
Non-essential shops in England can reopen from next Monday, but does this automatically mean shoppers will go back to our high streets?
People are still worried about shopping during the pandemic and data suggests we won’t shop in the same way. According to EY, only a quarter of people feel comfortable going out to buy groceries, despite it being a necessity, and 45 per cent of UK consumers believe the way they shop over the next one to two years will change.
Three factors that will play a role in the future of shopping are:
1. Location based technology - Understanding capacity in shops will give people confidence that stores are safe. For example, Springboard is reportedly working on an occupancy alert service for shopping centre owners so they can manage crowds and keep shoppers updated. This will give shopping centre owners knowledge to analyse demand.
2. Moving online - During the lockdown, many people who would usually go to a store chose to buy online. This has forced retailers to diversify and rethink their operations to be able to sell through digital. Retail Economics predicts this could be a long-term change in consumer behaviour; they expect half of all non-food spending to move online – up from around 30% today.
3. Marketplaces - Brands who sell through bricks-and-mortar stores have turned to marketplaces like Amazon, eBay, Not on the High Street and Etsy. In fact, Fashion United reported that in April that Asos Marketplace had added 80 new independent boutiques due to the lockdown. This increase is close to 100% growth in brands on last year.
Marketplaces not only provide retailers with a storefront, but an engaged customer base who browse the marketplace regularly for inspiration, as well as logistics such as tools to take payment and communicate with customers.
If people don’t go back to physical stores there’s no doubt it will be damaging for the retail industry. From analysis of the lockdown, the Centre for Retail Research reports we could see 20,620 store closures this year – up from about 16,000 in 2019. However, the move to online shopping is not new, it has just been accelerated by the pandemic. It will be critical for retailers to adapt with customers’ new habits, innovate and understand the opportunities digital presents for their business - both on the high street and online.
Shops in England will be allowed to reopen from 15 June, the Government announced, just hours after scrapping plans to get more primary school children back in class before September. Business Secretary Alok Sharma confirmed plans for non-essential shops to open their doors as the Government continued efforts to repair the economic damage caused by the coronavirus pandemic.