Effects of Covid-19 on Retail and 5 things you can do!
If you own a retail business that has a shop on the UK High Street you will undoubtedly be concerned about the future of your business.
It’s vital you look at the statistics and market trends to be able to make the right decisions.
In this article, I’ll be sharing with you:
How Covid-19 has affected us globally and the ramifications for the retail sector and the UK High Street.
What’s happening now with retail sales
We’ll look at consumer shopping habits during the pandemic and what they are predicted to be like going forward.
5 Things you can start doing right now to grow and future proof your business.
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HOW COVID-19 HAS AFFECTED US
What started as an epidemic in China, Covid-19 has now become a global pandemic.
On December 31st 2019, the World Health Organisation’s China office heard the first reports of a previously unknown virus and to date, nearly 9 million cases have been reported.
On March 23rd 2020, Boris Johnson put the UK under lockdown leading to Britain’s high street retailers suffering their worst month on record.
WHAT’S HAPPENING NOW
This is having a worldwide financial effect in all sectors and in particular for our British High Street.
BDO high street stats saw sales drop 17.9% in March as shoppers stayed indoors.
UK retail locations fell the sharpest at Easter, with a decline of 89.9%.
96% of retailers reported cash flow difficulties according to a Guardian survey.
Fashion stores saw sales dive 40.4% and lifestyle shops also reported a 24.6% decline.
Leicester Mercury quoted Sophie Michael, head of retail and wholesale at BDO, saying: “For most retailers, in-store sales make up the largest portion of their revenue and the pandemic has only sped up the shift away from in-store shopping as consumers become even more accustomed to buying online.”
Over 20,000 stores are likely to be lost by the end of the year, according to figures from the Centre for Retail Research, a massive leap on the 4,547 that closed in 2019.
Rick Smith, managing director and insolvency and company rescue specialists at Forbes Burton said "Retail has been hit particularly hard despite the Government's care packages”
So it looks like we’ll be saying goodbye to a number of large brands and chains.
Data gathered by the Centre for Retail Research reveals the retailers that have called in administrators this year like:
Quiz, Victoria's Secret, Cath Kidston, Autonomy Clothing, Aldo, Johnsons Shoes, Antler and many more.
The shutdown of all physical retail stores on the high street, combined with rapidly shifting consumer habits have led more customers than ever to become comfortable and competent with online ordering and delivery.
According to Bearingpoint, retailers without a credible online fulfilment option risk being caught in the middle behind sophisticated operators.
WHICH BUSINESSES ARE FLOURISHING
In April online shopping surged, growing 129% week-on-week in the UK and Europe, according to the latest research at Internet Retailing and it is rapidly shifting customer expectations of what they get from ecommerce.
Nick Turk, Director at the Retail Agency, Out-of-Town said “Inevitably online retail has done very well out of the lockdown, with exponential numbers using the internet to shop from sites such as Amazon.
The online retailer has been described as a “clear winner” from the coronavirus crisis, its share price surging by more than a third inside a month, its customers spending almost £9,000 a second on its products and services
In fact Amazon’s Jeff Bezos has seen his fortune grow by $6.4 billion in one day to nearly $24 billion (he is now worth $138 billion). The company’s shares hit a record $1.14 trillion, exceeding projections thanks to increased customer demand for their products and services.
Online fashion retailer Boohoo has agreed to buy the online businesses of Oasis and Warehouse for £5.25m.
Boohoo made the announcement as it said online sales rose by 45% in the three months to May, partly boosted by demand for athleisure items during lockdown.Manchester-based Boohoo also owns PLT and Nasty Gal. Earlier this year, it bought struggling brands MissPap, Karen Millen and Coast.
In April, Oasis and Warehouse went into administration losing 1,800 jobs. The previous owner had been in talks to sell the businesses before the crisis, but no buyer could be found for the High Street stores as the coronavirus pandemic accelerated the shift of shoppers to online.
Analysis from SEMrush shows Retail websites’ traffic Increased globally by 6% and grew from 12.8 billion to 14.3 billion in the first quarter.
Fashion ecommerce websites’ traffic Increased globally by 5% and grew from 2.2 billion to 2.6 billion in the first quarter.
CONSUMER SHOPPING HABITS
Being in lockdown did not discourage consumers from thinking about fashion. After all, we will all get through this coronavirus crisis and leave our houses eventually. Moreover, many clothing brands have promoted big discounts and sales to drive consumer demand.
Robert Lockyer at Delta Global said “Our online-centric clients are seeing a robust trading uplift, having to equally think creatively and be focused on the customer experience from their perspective. It seems crucial that they remain consistent with their messaging at this time especially throughout their marketing outputs, it all must relate and connect with the consumer on another level”.
For instance, luxury gym wear brand Sweaty Betty has been working alongside fitness enthusiasts and influencers to bring consumers a daily IGTV video of an at-home workout and nutritional advice. They are keeping thousands motivated with free exercise routines and a daily challenge to keep people connected with them.
It seems consumers’ priorities are also changing as a result of Covid-19. According to a Bazaarvoice survey, before the pandemic, respondents’ main priorities when purchasing were quality (48%), price (47%) and brand (24%). now, they’re mostly focused on availability (49%), price (36%) and quality (34%).
It’s interesting to see the change in priority for shoppers, with the focus moving to availability. This will prove a key time for consumers to try new brands they wouldn’t have before. This may result in a change in brand loyalty for some consumers who discover new products as part of their new shopping experiences, presenting opportunities for small businesses.
The bottom line here is that market analysts say that the ecommerce industry will be the biggest beneficiaries of the coronavirus pandemic with a 67% increase in five years.
5 THINGS YOU CAN START DOING RIGHT NOW TO GROW AND FUTURE PROOF YOUR BUSINESS.
It is clear that the coronavirus crisis will bring a long-term boost for ecommerce businesses. But the economic difficulties will pass, while consumer behaviours will continue.
SEMrush says ecommerce habits tend to become even stickier once people go online.
So, even if in the short-term, you may feel discouraged to invest in building an ecommerce future for your business. In the long-term, you are likely to double on the benefits.
Update your Google My Business page with the latest information on your business.
Optimize your website for higher rankings, increased traffic, better user experience, and conversions. Your online customer experience has to be well thought through and smoothly executed to make sure you make the most of this emerging trend.
Place your products on the most active marketplaces for your product category. Amazon, eBay, Google Shopping, Facebook Shopping, and Instagram’s Shop feature.
Go multichannel and make sure your product is present across various platforms like Amazon, eBay, Google Shopping, Instagram and Facebook Shopping. This will bring you scalability and ensure you are everywhere your customers are.
Grow and connect with your audience on the right social media channels for your type of business.
Social media has changed the way we live our daily lives, including the way we buy things. This is a great opportunity for brands to start thinking about how to improve their position on social media, which is a great platform for brands to get discovered. With consumers spending more time on different types of social media, ecommerce businesses can get help from Instagram influencers to increase their chances of getting discovered by their target audience.
If you don’t have an ecommerce presence now is the time to get your business online, even if your business is inherently bricks-and-mortar. There will be similar companies to yours that are also doing some incredible things online.
IN SUMMARY
It’s clear as the High Street will struggle coming out of the pandemic that you need to develop your online sales and marketing efforts whether you’re traditionally a bricks-and-mortar business or your an online business and you need to stand out and take advantage of the market trends.
You need to keep an eye out for ecommerce trends in 2020 and build a long-lasting relationship with your customers. Take your ecommerce evolution to the next level and drive your digital marketing strategy to future proof your business for years to come.
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