Abandoned stores, less choice … has shopping changed forever? | Retail industry

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ONEAfter almost a two-year hiatus, Covid-19 has forever changed the way we shop. It changed not only what we buy but how we buy it too. Big buys come with clicks, not shopping trips, and remote working has made the home decor market the new fast fashion.

According to analysts, it also means the end of overwhelming choice for consumers as gaps on shelves and long lead times become a frustrating fact for items like cars and couches.

Lifestyle changes due to health or environmental concerns also help kick-start new services. Investors are investing billions in fast grocery delivery as buying secondhand clothing and renting furniture enters the mainstream. In the main streets, cheaper rents attract independent businesses.

Here’s a look at some of the big changes that are taking place.

buy food

The pandemic was worth $ 212 billion in the UK food industry.The return of the weekly store during the strictest blackout periods looked like it had saved the big supermarkets from a midlife crisis, only an army of fast delivery companies like Getir, Gorillas and Jiffy showed up with the promise of delivering your groceries in less than half an hour.

According to IGD, the Chamber of Commerce for the food and consumer goods industry, this so-called quick commerce has “exploded” and has now become its “own channel”. It is estimated that 13% of UK shoppers are now using these services, with sales this year $ 1.4 billion.

Bryan Roberts, an analyst at Shopfloor Insights, says the health crisis has created the kind of market conditions where people are “willing to pay a £ 20, 15 minute delivery fee for a delivery experience,” though he adds, “Time will tell whether these models are sustainable. “

The big chains’ expanded online offerings have won millions of new customers even during the pandemic, but with inflation at a 10-year high, the sands are moving again, with discounters like Aldi and Lidl being the likely winners for months while the British are looking for cheaper stores.

While there are more shopping options today, the supply chain problems behind the scenes have led the major grocery brands to break the book of discounters and reduce their assortments in order to become more efficient.

Richard Wilding, professor of supply chain strategy at the Cranfield School of Management, says that “the wealth of choices we had will change”.

“Before you could buy 60 different types of pasta in the supermarket, then during the pandemic the manufacturers began to rationalize their ranges so that there were only 20 types at a time,” he says. “Having new and interesting products has traditionally been one way of creating consumer demand, but companies basically say we have to focus on the things with the higher margins.”

Fast grocery deliveries by couriers like Jiffy are a new threat to supermarkets. Photo: Mark Chillers

To work from home

The move to home work has had such a profound impact on our lives that it has become a supertrend in retail itself. It has changed spending priorities as the money that is normally spent on international vacations or commutes is put into home furnishings and renovations.

Being at home 24/7 has also accelerated the shift to online shopping. It took online sales eight years for online sales to double its share of spending to 20%, but within only nine months during the pandemic this figure reached 36% last year. In the wake of this year’s easing of restrictions, it fell to a still respectable 26%.

“Working from home has changed both shopping behavior and demand patterns,” said Richard Hyman, an independent retail analyst. “Markets like fashion, food, beauty and homeware have changed in shape, but the question is: have you found a new, permanent job? It’s still very fluid because nobody knows how many people will continue to work from home. “

The profile of consumer spending has changed dramatically: for example, shoppers spent an additional £ 503 million at home improvement stores this year, according to retail data firm Kantar. The British also took on new pastimes: 1.2 million new gardeners spent an additional £ 51 million on plants and related paraphernalia.

“Not everyone works from home, but in general the way we socialize and shop is a lot more home-based,” says Joanna Parman of Kantar.

“We don’t drive far to go shopping or to eat at the weekend. Therefore, we are more likely to visit local or independent stores than before. “

She adds, “A lot of people have lost their looks and are investing in the look of their home so that it is Instagram ready and looks good in the background when they make phone or video calls. They invest a lot more in their homes and it could be argued that we are seeing some trends in “quick housewares.” “

Fashion

Brits traded style for comfort during the pandemic: See loungewear sales jump 88% over the past year. Long-time high street store closures have forced shoppers to buy the clothes they need online and there may be no going back.

Data firm Retail Economics estimates that half of the £ 51 billion spent on clothing this year was bought on websites. By 2025 it is expected to be two thirds of the total. This is already the case with electrical engineering, one of the fastest moving online markets.

“The pandemic shows that we as a nation have been able to adapt and change our behavior, sometimes overnight,” says Parman. “There aren’t many guidelines that say we shouldn’t socialize, but people have already withdrawn from eating. We are driving much of the change in our habits, and the longer they last, the more likely it is that they will stick. “

There are other great forces at work in this market as well. The fashion industry is a big polluter and under increasing pressure to get on a more sustainable footing, more and more companies are experimenting with selling or even renting secondhand clothing, a model that previously focused on outfits for special occasions.

The UK’s largest clothing retailer, Marks & Spencer, is running a small test to see demand for its dresses and coats to be rented out – a trend that’s more advanced in furniture, where people like John Lewis rent out sofas, sideboards and desks.

As always, fashion-conscious teenagers came first and are already spending their money on thrift websites like Depop and Vinted, which are reporting huge increases in sales. Parman believes the apparel rental market is a “trickier” model, but predicts that the popular fashion market will grow even stronger in 2022.

A teenage girl uses her cell phone to take a picture of an item of clothing her friend is holding up for a second-hand app
Second-hand app sales have increased
like Vinted and Depop.
Photo: Photononstop / Alamy

cars

The used car boom has already hit the auto market, where used car prices, which have risen by 31% since April, are fueling inflation. Typically around 2.5 million new cars are registered in the UK each year, but that number dropped to 1.6 million in 2020, with a similar number expected this year as a shortage of computer chips affects production. This shortage is one of the factors driving second-hand prices so high.

Ian Plummer, Commercial Director of car dealer Marketplace, says Covid, has forced a reluctant industry to embrace the internet. Buyers want to be able to do more footwork online, from evaluating their current car to applying for financing. In view of the associated costs – a car is second only to the average household after owning a home – “seeing, touching, smelling” the chosen vehicle remains an important last step.

The turmoil has seen some upside, with recent numbers showing a doubling in EV sales. Almost 22,000 all-electric vehicles were registered in November, more than twice as many as in the same month of 2020.

“In the course of 2021, a new electric vehicle will come onto the market every 10 days and there will be even more cars next year,” says Plummer. “It’s a big change in the market: more supply, more marketing, more excitement that was fueled by the fuel crisis.”

Shops

The rapid spread of the Omicron variant has devastating news for stationary retail, as the number of buyers declines on one of the most important trading days of the year in the run-up to Christmas. Since the Covid crisis is apparently far from over, the jury remains open what the long-term consequences for Hauptstrasse will be.

The stream of household names that failed prior to Covid has been accelerated by the lockdowns. Recent data from the British Retail Consortium shows that empty stores hit a record high of 14.5%.

The crisis has pushed rents down, but staggering business rates remain a major problem that the government is reluctant to deal with. There is glimmer of hope, however, as the same data points to declining vacancy rates in some regions as independents move in to fill the vacancies of defunct chain stores.

But there will, no question, be more painful changes. Hyman points to the £ 90 billion in non-food sales that have gone online in the past 20 years, a time when there has been no “sensible” reduction in retail space.

“The cost of selling in a store is much higher now because you have a high fixed cost base and lower sales,” he says. “When that is all over, we will still have too many shops and too many websites.”


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