Strategy

Growth of the online retailer: will this pandemic change the way we shop forever?

By Al Davies / June 10th 2020

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Although there are worries about the economy recovering after the pandemic, the ecommerce market has seen surge in revenue during lockdown, as buyer habits change, more businesses turn to online retail, and fears over contracting COVID-19 continue.

But will this pandemic change the way we shop forever? Contactless payments are becoming the only option in many physical stores and, although shops are due to open back up from 15 June, it’s unclear how many consumers will feel uncomfortable entering a store again, especially to simply browse.

Rumours are circulating that clothing and shoe shops will quarantine items once they’ve been tried on – and even book stores are thinking about implementing strict rules on touching novels you’re not going to buy. With car showrooms already back open since 1 June, we’re wondering whether all vehicles are getting a complete valet each time they’re taken for a test drive…

This makes the art of shopping incredibly different to what we’ve seen before – and calls for technology to make changes to how we shop. Could stores start implementing screens, which will allow you to scroll through to see what’s in stock (similar to an Argos catalogue), so you don’t have to trawl through shelves and rails? Will you virtually be able to try on clothes? We may see something similar to ASOS’ ‘See My Fit’ feature appear in stores, where a virtual catalogue will illustrate how an item of clothing may look on you. This begs the question, what is the point of a physical shopfront, if we already have the means to implement this online?

The growth of the online retailer has been expanding since the mid 1990s – and we don’t expect it to stop. However, the industry is shifting because of the pandemic, so what have we seen so far and what should companies be aware of for the future?

What changes have we seen in online shopping during the pandemic?

  • Increase in demand for home delivery and click & collect on all products, especially essential items

Consumers are prioritising essential and necessity items over more frivolous purchases – with clothing taking a nose dive. This has led to fashion retailers making an increase in discounts to promote sales – but being dressed up with nowhere to go doesn’t seem to be at the top of most consumers’ lists right now. In fact, in April 2020, 73% of clothing websites were offering some kind of discount or sale. We’ll be stockpiling socks if anyone needs us.

Unsurprisingly, sales of items, such as luggage, have decreased by 77%, and swimwear, which is down 62%. We’ve found that sunbathing in your underwear has the same effect.

  • Drive towards already established online retailers because of trust factors

There are still many cautionary tales of consumers buying online and being fobbed off. From stolen credit card details to orders not turning up, it’s no wonder we buy from established and reputable retailers – especially during a pandemic. We want to know our orders will be fulfilled and that items will be handled with care and hygienic measures are in place. It seems like many consumers don’t think lockdown is the time to try somewhere new.

We’re also expecting our favourite online retailers to start selling the products we need and delivering them in the way that we want, such as contactless delivery. Retailers such as John Lewis and Curry’s PC World, which had been struggling before lockdown, have seen a resurgence of online sales. Although perhaps they don’t have the most competitive prices, consumers are more interested in the safety of the sale and whether or not it’s in stock.

This is further illustrated in the amount of extra money we’re spending on food shopping, with a whopping 45% of us spending more on groceries, simply because we’re having to buy what’s available, not always what’s on offer.

  • Increase in usage and subscription to consumer services, Pact Coffee, Naked Wines, Craft Gin Club, Netflix, Hulu etc.

With so much more free time, it’s no wonder subscription services have seen 4.6 million new subscribers sign up. Streaming services, such as Netflix, Disney+, and Amazon Prime, are overwhelmed by viewers, as individuals in lockdown crave more content – and watch reruns of their favourite shows, as some element of comfort. RuPaul’s Drag Race season six, anyone?

And monthly alcohol subscriptions are no different. A few of these have been around for a while, but the impact of coronavirus has seen more and more pop up, with thousands of Brits choosing to sign up. We’re still buying alcohol ‘traditionally’ however – back in March, sales of alcohol increased by 22% and we wiped the shelves clean due to stockpiling.

  • Customers have already switched existing services and products that are currently available online from their existing brand or supplier

Although we may not be buying from stores we don’t trust, we’re still switching our buying habits to use different retailers. If you can’t buy it from your favourite supermarket or store, you can almost definitely find it in another. The magic of online retail is being able to browse en masse, without stepping outside your door.

  • Increased levels of anxiety throughout the nation for face-to-face contact could potentially be at high levels for years exiting lockdown and directly impacting brick and mortar only businesses

Although the shops are due to open next week (15 June), this doesn’t guarantee that buyer behaviour will go back to ‘normal’. In fact, it’s almost definite that stores will change how shoppers can browse, from suggestions of queuing systems continuing to changing rooms not being available for us. Research has also shown that 43% of Brits don’t feel comfortable shopping again, apart from in supermarkets.

Usually, you know exactly what you need when you go into a food store, as you’re there for a reason; clothing and other discretionary products don’t have the same buyer organisation. And even when buyers begin to feel less anxious, there will be a certain percentage of shoppers who will never return to their previous behaviour – and this percentage will have a direct impact on brick and mortar stores.

Businesses need to take notice of these changes and update their selling model, to reflect buyer behaviour. This is especially important for smaller companies and ‘traditional’ stores, such as butchers and bakeries – even milk deliveries.

  • Reduction on impulse purchasing whilst in shops, but increase in impulse purchases for online delivered items

As buyer behaviour changes, we’re not as keen as overstaying our welcome in stores, so companies can expect to see impulse purchases decrease – we know what we’re shopping for and we don’t want to deviate from that.

However, impulse buys online are increasing. Discounts, sales, and low stock cause consumers to be drawn in by special offers. Moonpig are especially clever at this – bought a birthday card? Send them some flowers or chocolates as well. And these impulse buys aren’t cheap, not like a chocolate bar or five pack of socks near the till when you’re queuing. They’re £25 bunches of flowers, items you’ve bought before from a supermarket, and packs of batteries that you’ll never know when you’ll need.

What do retailers need to do?

It’s all well and good showcasing how lockdown and a global pandemic is changing the way we shop forever, but what can businesses do to adjust to the changes and help buyers?

  • Increase and improve your digital and online presence

More people than ever before are interacting on social media to stay in touch with relatives and friends, and although we might not like to think it, this means we’re being exposed to advertising and promotions. Brands can also be a beacon of reassurance during these difficult times, without self-promotion, from thanking the NHS and keyworkers, to making a stand for Black Lives Matter, even without trying to sell, making your consumers aware you’re still here is essential.

Online and social media marketing has never been more important to maintain that community presence that is lacking with diminished foot traffic. Businesses that didn’t have an opportunity before, can now start marketing nationwide.

If you’re a local business, don’t be afraid to reach out to current customers, whether that’s via social media or email, and ask them how they’d prefer to buy from you.

  • List inventory online so customers know what is being offered and its availability, special offers, limited time products etc.

Customer experience is essential during stressful and difficult times, such as a global pandemic. User experience is even more important, ensuring that your website, however big and however new, can handle enquiries and orders and provide consumers with the information they need. Listing inventory online, as well as product notes, such as ‘low stock’, is important for overall user experience. We all know how frustrating it can be to add something to our basket, only to be told at checkout that it’s no longer in stock.

Being open and honest about limitations, whether that’s stock levels or delivery issues, is crucial to maintaining a loyal customer base. Frustrated customers will shop elsewhere.

  • Demand for boutique and bespoke, high quality products remains. Small, local, and unique businesses can increase reach through online marketing and by having an online web presence

Although consumers want reassurance when buying, which is why so many of us stick with the brands we know (but not necessary love), buying local has never been more important. Consumers are still demanding high quality, bespoke products – but they need to know where they can buy them from. Local, boutique businesses need to promote themselves through a better online presence – as well as taking advantage of platforms people know and trust.

For instance, Etsy, who primarily sell handmade and personalised products from a number of different sellers, saw a 79% increase in sales in April 2020. This is both from buyers being unable to find what they want elsewhere and new businesses opening. Sellers need to provide buyers with a range of alternative options on how to buy, whether that’s via Facebook Marketplace, PayPal, or Etsy.

  • Online market places such as Amazon or eBay, are an easy way for brick and mortar retailers to start selling online, accessing a large customer base

Following on from the above point, it’s not just the likes of Etsy that consumers have been flocking to. Giants such as Amazon and eBay are simple ways for retailers to take products and services from their brick and mortar stores and begin selling online. The benefit of these platforms is that you automatically inherit the trust factors from those types of brands – however, creating your own online presence will allow you to build your own.

  • Click and collect services and over the phone ordering

It’s not just supermarkets that can take advantage of click and collect. Duxbury’s Home and Garden centre in Preston, Lancashire, has been offering a personalised shopping experience – all from the comfort of your own car, whilst you wait for the items to be taken to you. This reduces consumers’ fears over social distancing – but also means they know when they need to pick their products up, without waiting for delivery times.

Similarly, over the phone ordering is making a comeback. The internet still isn’t accessible for everyone and neither is digital literacy, which means smaller businesses can take advantage of taking orders over the phone – something larger companies would find difficult to implement.

  • Add online purchasing to existing websites

Website add-ons, such as Woocommerce, are a simple and straightforward way to turn your site into a money generating platform. If you’re a smaller business, with a basic brochure website, this can be a great way to integrate ecommerce functionality, without the price tag of an ecommerce website.

Although lockdown restrictions are easing and shops beginning to reopen, there’s still no knowing how consumers will react and what a post-pandemic recession may look like. Smaller and local businesses should focus on adapting to buyer behaviour, keeping their customer base loyal, and provide consumers with the ability to continue buying from you, with a strong, online presence.

At every1, we’re committed to helping local businesses develop their online presence and reach their customer base, no matter what the situation.