Will the retail sector survive the crisis? What will the future of shopping look like?
Whatever might be the case, the retail sector (as every sector, after all) will have to transform and adapt to a new reality.
In the fifth part of our global COVID-19 study, based on the answers from 4,500 people across the globe, we concluded that many consumers still enjoy and will continue going to stores. Despite the lockdowns and store closures, online shopping didn’t grow exponentially, or at least not as it was expected. Online shopping remains a practical, safe and secure way of purchasing, but the crisis didn’t cause a significant shift.
The “shifters” lead the way to online shopping
Across all markets, the proportion of regularly bought product bought online increased from 40% to 48% during the lockdown. However, it's likely to slip back to 45% once the pandemic has subsided. The most significant permanent shift will be seen in the UK, Brazil and South Africa, which is catching up from a lower base. On the other hand, it appears there will hardly be any structural shift in markets like Germany or China.
At first glance, it might seem how online shopping stayed more or less at the same level during the lockdown as it was before. However, there are other numbers that we can’t ignore. We identified a group of 20% of respondents who claimed they would significantly shift their behaviour towards online shopping in the future after this pandemic recedes.
The presence of these “shifters” is very different across the globe with more than 40% of South Africans saying they would buy more products online in the future compared to just 12% in Germany.
Looking at the people in this group, age is a universal factor with far more “shifters” in the “under 35 age” group compared to the “over 55 age” group. This could well be because younger age groups are more digitally oriented and typically buy more online.
Here it’s important to highlight how younger people have been more affected economically by the crisis, and this sentiment will influence their future shopping behaviour. The younger generation will be more careful about what they spend their money, which translates to shopping less and reducing unnecessary expenditure.
On the other hand, older age groups seem to stay loyal to traditional shops. Nevertheless, they are cautious about how their shopping experience in the physical stores might look like in a post-COVID world. So, while their shopping behaviour might remain the same, their engagement and expectation around the shopping experience might change drastically.
The evolution of retail
The retail sector will continue to change and evolve as more businesses adopt the “bricks-and-clicks” model or move online altogether.
Before the crisis hit, we already witnessed the expansion of “clicks-and-bricks” model, and now with the economic and social changes, this combination is still key. For older generations who perhaps have not been impacted as much by the pandemic, stores will remain a central component of their overall shopping behaviour but they need to feel safe and secure. For younger generations who have perhaps been hit financially over the past few months, online channels will be their channel to shopping in a more focussed and economic way.
