Despite footfall to stores picking up month on month after physical retail reopened in April, the pandemic is estimated to have accelerated the pace of change by over 3 years
In many ways, 2021 has felt like a more challenging year for retail than 2020. It’s hard to believe that this is true, given the shock and fear that so many of us felt last year, but in 2021 retailers have had to juggle and pivot, then juggle and pivot some more, all while dealing with a considerable amount of “pandemic fatigue”.
Add to this the complications of Brexit and continued supply chain disruptions from both Covid and giant ships (remember the Ever Given?) and it’s no surprise that this has been a difficult time.
With the new Omicron variant appearing on the horizon to threaten the crucial Christmas trading period, the end of the 2021 seems to be tricky and worrying, in keeping with the rest of the year.
Online shopping is growing, and changing
Regardless of how the latest variant plays out, concerns over customer safety and confidence are a stark reminder that this pandemic is far from over. Retailers need to be more focused than ever on their digital presence to help protect them should footfall start to drop again, but to also address the number of customers who are now happy to shop online.
Many smaller businesses will be able to take advantage of live selling to help engage customers even when they aren’t coming into stores
Despite footfall to stores picking up month on month after physical retail reopened in April, the pandemic is estimated to have accelerated the pace of change by over 3 years, and against 2019 levels, footfall is still lagging behind. Currently, around 30% of all money spent in retail is being spent online. Without the pandemic, these levels were not expected until 2024.
Not only are more customers than ever shopping online, and buying more variety of products online than ever before, but the way that customers want to shop is changing. Social selling is the fastest growing sector in e-commerce, where customers are building relationships with brands on social media, and buying from them on social platforms too.
“Live selling”, or selling on video with the option to purchase as the viewer is watching, is emerging as a trend to watch, tying in perfectly with newer platforms such as TikTok, which is having a pandemic-fuelled moment. Already hugely popular in China, this method of selling is spreading. In the US, even major retailers like Walmart are hosting live-selling events.
With a low barrier to entry (all you really need is a phone), many smaller businesses will be able to take advantage of live selling to help engage customers even when they aren’t coming into stores.
Supply chains remain compromised
Perhaps inadvertently these supply chain issues will usher in a new climate with fewer promotions, which can only benefit businesses and environment alike
Supply issues remain top of mind. Hardly a week goes by without a retail boss telling people to buy now or risk losing out closer to Christmas. Major disruption across the globe is still having a knock on effect on the availability of goods, particularly electronics and appliances.
An interesting side-effect of these delays has been a reduction in the number of heavily discounted promotions that retailers are running, even at this highly promotional time of year.
Given the rise in cost of almost every element of producing products from raw materials to energy and transportation costs, this reduction in discounting is partly a result of not having excess stock to reduce, and partly by a growing need to offset these increased costs that are battering profit margins that are already wafer thin.
Consumer confidence in promotions is already wearing thin, with one survey showing that 42% of shoppers felt that Black Friday was just about big retailers getting more money out of customers. Perhaps inadvertently these supply chain issues will usher in a new climate with fewer promotions, which can only benefit businesses and environment alike.
Shopping small and local is key
Shopping small and local is becoming more important than ever, with 91% of people saying they care about small businesses, according to research by entrepreneur and small-business campaigner Holly Tucker.
The importance of shopping small has been highlighted by several campaigns this year, including Tucker’s own “Campaign Shop Independent”, Just a Card’s Indie Week which reached 55,000 small businesses, and Small Business Saturday, which this year falls on 4th December.
Last year Small Business Saturday achieved record-breaking success and saw an estimated £1.1 billion spent with small businesses across the UK on the day, according to research from American Express, the campaign’s founder and principal supporter in the UK.
Another campaign that has grown in popularity is Museum Shop Sunday, which has had over 160 shops taking part at cultural attractions across the UK, and over 1,800 worldwide. 2021 was the biggest year yet for this campaign and it highlights the customer’s appetite for supporting small and local businesses as well as cultural shops.
The continuing interest in, and growth of, the independent business sector remains a bright spot amongst increasing uncertainty, and paints a more optimistic picture as we head into 2022. The key will be retailers focusing on what they can do that is unique and different, showcasing local talent and tapping into the customers desire to shop small, both online and offline.