As the wild 2020 ended, besides bringing Covid-19, it changed the world of retail as we know it. Online purchase behaviors accelerated, 2020 brought new habits in consumers and changed vastly the landscape of retail. The new priorities for consumers are safety, health, and comfort. We have analyzed information and find 5 important facts to consider in this new retail normal to stay tuned to consumer preferences and assure a successful 2021 and the future ahead.
CONVENIENCE IS KING
According to a report from Deloitte (the future is coming but still one day at a time), more than 50 % of consumers reported spending more on convenience to get what they need. And by convenience being defined as buy online, contactless shopping, pick up at curbside, self-service technology, touchless payment formats, stock availability, QR Code, and augmented reality for product information or demos.
PRIVATE LABELS
Consumers in 2020, have a significant increase spent on private label products, with price points playing a key role as well as preference for stock availability. According to a McKinsey study, 20% of consumers switched to store brands, and 50% plans to stick with it.
BRICK AND MORTAR NEW ROLES
Covid-19 has demonstrated the importance of physical stores. In many cities, during lockdown store locations served as a distribution point or delivery hub for consumers to pick up orders. Once they open again, they are seeing the effects of the Omni-channel as consumers now plan their trips to stores, reviewing products online, visiting less but spending more on each trip and if the trip is not worth it, they will order it online. In December 2020 International council of shopping centers revealed that 52% of shoppers are interested in using click and collect. The ability to see, touch products, and receive them immediately ranked in the top reasons to visit a store.
HEALTHY & SUSTAINABLE PRODUCTS
Consumers are modifying their habits such as cleaning surfaces and washing hands and more than 85 % are planning to continue with it. Also due to the new stay and work at home, consumers are buying healthy and sustainable products, this trend is stronger in high-income household and could be influenced by out of stock products but we are certain that this trend will keep growing in middle-income households.
ONLINE STORE IN OFFLINE SPACES
We are seeing an increase of online stores expanding in opening brick and mortar stores, the hybrid format of e-commerce and the physical store has shown great benefits for online players such as lower return rate of the product, the ability to be closer to the consumer, offer curbside pickup, ship orders at a lower cost, and offering a better buying experience with the leverage of technology and the convenience of e-commerce. Also, Brick and mortar stores are moving forward to the digital world to offer omnichannel format to the consumer.
CONCLUSIONS
- The retail industry has seen a massive shift from consumer behavior and spending patterns to navigating a new retail normal.
- 2020 made e-commerce grow 130 % with a significant gain in categories like grocery. Conversely, the complexity of online order fulfillment and delivery costs has brought significant implications. Digital growth will remain strong but the ability to profitably pursue growth remains under big pressure.
- Brick and Mortar retailers must embrace Omni Channel as consumers have become hybrid buyers that move back and forward from digital to physical world.
- Investing in technology inside and online the store is key to offer convenience to the consumers.
- Retailers with strong Private Brands can find growth expanding their brands in new categories.
IBG 