Undoubtedly, the pandemic has caused economic damages at a global level and the retail sector is not the exception. Though the coronavirus keeps with its expansion on the American continent, also including some new outbreaks in Europe and Asia, we are beginning to see how’s life going to be like in the new normal. That is why we will tell you 10 ways in which the pandemic will change our shopping habits. Is then retail industry ready for the challenge? Just keep on reading and find out!
Consumption, hygiene and trustfulness
During the so called ‘new normal’, people will go out again to buy products or services. However, this will not be as it was before, at least not in the short term. According to experts, consumers are going to be more careful while shopping in physical stores. They will prioritize shopping in stores that guarantee safety and hygienic standards and those that during the health crisis, helped and protected the community, their clients, and their employees. Efforts definitely rewarded by society.
Accelerate growth in online shopping
It may sound obvious, but even after quarantine, online consumption will still continue to grow in Europe as well as in the United States and Latin America.
Not everything is what it seems, because the growth in online shopping has its dark side: the increasingly eminent closure of big malls and specialized retail stores. According to a Coresight Research report, more than 15.000 retail stores are expected to shut down in the US during 2020, something that would represent a 50% growth compared to 2019 and that confirms a descending tendency that has been happening since 2017.
The resurgence of malls
Due to the reduced number of consumers that will choose to go shopping at malls, they’ll have to look for a different way to keep being somehow relevant. They won’t be retail exclusive anymore, they’ll have to reinvent and adjust to the community needs, to be a place where the consumer lives unique experiences.
Major companies will lead the industry
During the first weeks of the pandemic, specialists assure that big players such as the most powerful retail chains, are going to be the leaders. Why? Because they have a strong economic backup to overcome this kind of difficulties and to quickly recover. This, compared to small retail businesses who can support themselves financially on a monthly basis, is a huge advantage.
A research from the US National Bureau of Economic shows that only 33% of retail small companies assure they’ll get through if the compulsory confinement extends to four months or more. On the other side, big corporations such as Amazon and Walmart, are offering more than 700.000 jobs as they face a growing demand on e-commerce.
Major companies may stand as the only option. However, a lot of consumers value local stores during the pandemic and will continue to do so, because they want to keep on supporting them. That is one of the quarantine positive effects, people started to value more their neighborhood stores.
Less or none human interaction
Two already existent purchase options will probably become more popular among consumers. We are talking about buying online and then picking up in store or, checkout-free shopping, something possible thanks to mobile phones scanning systems present on each product, or a QR code scan while entering a store, being able to buy whatever you want and leave, as does Amazon-Go. Being super effective as they don’t involve human interaction. In fact, referring specifically to Amazon, it already has 20 stores of this kind in the United States, it’s also going to expand to Great Britain, and plans to license this new purchasing technology so that it can be used by other retail companies.
Moreover, what the pandemic has highlighted is that the most important thing for a retail business is that its products reach their public in a quickly and simple way. That is why stores will stop being brick-and-mortar and will become pick-up points. Consumers will be shopping at home and picking-up the product at the store. Something more agile and comfortable for the client, and more effective and cheaper for the vendor.
According to a Mastercard Spain report, 66% of Spanish people chose to pay contactless during quarantine. It is a fact that this payment method has come here to stay, given that 75% of the interviewed said that they will continue using it once the health crisis is over. 22% stopped paying cash, and 40% changed their credit/debit card to one contactless. Something that is booming all over Europe and the United States, and where the future goes.
The omnichannel experience
Omnichannel in retail is something that we have already talked about. Of course, big companies, such as Walmart and Amazon, have no difficulties in implementing it, and small retailers have to really make an effort. However, in the near future, it can make an enormous difference because, for the consumer, it is almost a habit to research a product online, buy it and then go and pick it up. But for the retailer, it really means a huge challenge of efficiency, logistics and organization, that often does not show.
Another of the retail areas that has been deeply affected by the coronavirus is restaurants. Once again, big chains such as fast food have kept up thanks to its takeaway and delivery services. In the contrary small restaurants, have been deeply damaged and will take a while till they recover. Opening with a reduced number of tables in order to comply with the social distancing is not enough to get ahead quickly so for the near future a good alternative is to add ‘delivery’ services.
Experts assume, as it happened during previous world economic crisis, that consumers are going to pay more attention to special discounts when they’ll go and buy something. Lot of people will think twice before buying stuff that’s not essential, like a new pair of shoes. Pete Nordstrom, president of the major commercial chain ‘Nordstrom’, already said it a couple of months ago in the Vogue Global Conference: “We’ve just got to figure out a way to be relevant… We don’t sell things people need, we sell things people want”.
How do you think the retail world is going to be after the pandemic?