Over the last decade we have seen some very interesting shifts in the retail industry. After the ‘all digital’ era and some massive investments in e-commerce platforms for retailers, the last five years have shown us that brick-and-mortar isn’t dead if brands can combine a high-end and unique in-store experience with the easiness offered by e-commerce.
Then Covid 19 happened.
Lockdown has shown us that e-commerce is more vital than ever and it’s likely the e-commerce growth we’ve seen would have taken years to achieve in a non-pandemic context. So the question now is, with the re-opening of non-essential shopping in most of the European countries, will e-commerce slow down? Or with so much uncertainty and safety concerns will consumers give up the street retail?
Ultimately, it’s still a bit early to say as we are still going through adaptation but we’ve noticed two very different approaches from brands:
- Retailers reaffirming their focus on brick-and-mortar – Primark is a primary example of this as they made a conscious decision to remain an only brick-and-mortar retailer despite losing £100 million a month during lockdown. If the leadership team said they won’t be making a decision because a ’once -in-a-hundred years pandemic’, the reality seems more complex and it’s been said there was no rush to go online due to concerns about the net profitability of ecommerce.
- Retailers increasing their e-commerce investment – Some retailers, such as H&M and Zara, had started to reduce the number of their stores way before the pandemic and they will keep following this approach with Zara online sales increasing by 95 per cent in April.
Another interesting consideration is the latest Online Retail Index from IMRG and Capgemini that found that overall online retail sales in June surged 33.9 per cent year-on-year – a new 12-year high since March 2008.
This is a strong percentage but let’s keep in mind the UK only allowed non-essential shopping to re-open from Mid-June. The next reports should let us know if the online experience will definitely win over the physical experience or if the future lies in a more consistent and balanced omnichannel approach.
Want to share your thoughts?
If you would like to discuss and learn more about the future of e-commerce - Hotwire will be hosting a round table on Thursday, 6th of August at 4pm (BST) on the subject of “The Future of E-commerce – Greater Power and Greater Responsibility?”.
If you would like to join us and share your thoughts with your industry peers, please register here and get in touch with me at firstname.lastname@example.org or Brittany Atkins at email@example.com. We’d love continuing the discussion with you.
Primark's resistance to shifting to online has for years baffled consumers and investors alike. In an age when online shopping is thriving, Primark has continued to expand its physical selling space.