ANearly two years of disruption, Covid-19 has forever changed the way we shop. It has changed not only what we buy, but also the way we buy it. Big shopping involves clicks, not errands, and remote working has made the home interior market the new fad.
This also marked the end of an overwhelming choice for consumers, analysts say, as shortages on shelves and long delivery times for items like cars and sofas become a frustrating reality.
Lifestyle changes due to health or environmental issues also encourage the start-up of new services. Investors are investing billions in fast grocery delivery, while second-hand clothing purchases and furniture rentals are entering the mainstream. In the shopping streets, cheaper rents are starting to attract independent stores.
Here’s a look at some of the big changes underway.
The pandemic has caused major upheaval in Britain’s £ 212 billion food industry. The return of the weekly shop during the strictest lockdowns seemed to have saved large supermarkets from a midlife crisis, only for an army of fast grocery delivery companies, like Getir, Gorillas and Jiffy. , emerges with the promise of delivering your groceries in less than half an hour.
The IGD, the trade body for the food and consumer goods industry, says this so-called fast-paced trade has “exploded” onto the scene and is now a “channel in its own right”. He estimates that 13% of UK buyers are now using the services, with sales reaching £ 1.4bn this year and set to double within five years.
Bryan Roberts, analyst at Shopfloor Insights, says the health crisis has created the kind of market conditions where people are “willing to pay a delivery fee for a 20 pound, 15 minute delivery experience”, although he adds, “Time will tell if these models will be sustainable.
The extensive online services offered by the big chains also gained millions of new customers during the pandemic, but with inflation at its highest level in 10 years, the sands are changing again, with discounters such as Aldi and Lidl the likely winners in the next month or so as Brits seek cheaper stores.
There may be more ways to shop these days, but background supply chain issues have prompted major grocery brands to take notice of the discounter’s book and downsize their ranges to become more efficient.
Richard Wilding, professor of supply chain strategy at the Cranfield School of Management, says “the abundance of choices we’ve had is going to change.”
“Before you could buy 60 different types of pasta at the supermarket: then during the pandemic manufacturers started to rationalize their lines so all of a sudden you could only get 20 types,” he says. . “Having new and interesting products has traditionally been a way to create consumer demand, but companies are basically saying ‘we need to focus on the higher margin stuff.’
Work at home
The shift to working from home has had such a profound impact on our way of life that it has become a retail super trend in its own right. He changed spending priorities, as the money typically spent on vacation abroad or commuting is spent on furnishings and renovations.
Being at home 24/7 has also accelerated the transition to online shopping. It took eight years for online sales to double their spend share to 20%, but barely nine months during the pandemic, that figure has risen to 36% Last year. The easing of restrictions this year brought it down to a still substantial level of 26%.
“Working from home has changed both the buying model and the demand model,” says Richard Hyman, independent retail analyst. “The shape of markets like fashion, food, beauty and housewares has changed, but the question is: have they landed on a new permanent position? It’s still very fluid because no one knows what proportion of people will continue to work from home.
The profile of consumer spending has changed dramatically: For example, shoppers spent an additional £ 503 million in DIY stores this year, according to figures from retail data company Kantar. The British have also embarked on new hobbies: 1.2 million new gardeners spent an additional £ 51million on plants and related accessories.
“Not everyone’s job is from home, but in general the way we socialize and shop is much more home-centered,” says Joanna Parman of Kantar.
“We travel less far on weekends to shop or eat out. So we are much more likely to visit local or independent stores than before. “
She adds, “A lot of people are clueless about their looks and invested in the look of their home, so she’s Instagrammable and looks great in the background when you’re on the phone or on a video call. They are investing a lot more in their homes and you could say that we are seeing some “quick housewares” trends emerging.
Britons traded style for comfort during the pandemic: witnessing an 88% increase in sales of loungewear last year. Closing street stores for long periods has forced shoppers to buy the clothes they need online and there may not be going back.
Data firm Retail Economics estimates that half of the £ 51 billion spent on clothing this year will have been purchased from websites. By 2025, he believes that figure will be two-thirds of the total. This is already the case for electricity, which has been one of the fastest markets to move online.
“What is clear from the pandemic is that we as a nation have been able to adapt and change our behaviors, sometimes overnight,” Parman said. “There aren’t a lot of policies saying we shouldn’t socialize, but people have already retired from eating out. We drive a lot of changes in our habits and the longer they are in place, the more likely they are to stay. “
There are also other great forces at work in this market. The fashion industry is a big polluter and under increasing pressure to position themselves on a more sustainable basis, more and more companies are experimenting with second-hand clothing sales or even rental, a model that previously focused on outfits for special occasions.
The UK’s largest clothing retailer, Marks & Spencer, is running a small trial to test rental demand for its dresses and coats – a trend that’s more advanced in furniture, where John Lewis rents sofas, sideboards and offices.
As always, fashion-conscious teens came first and are already spending their money on second-hand clothing sites like Depop and Vinted, which are reporting a big increase in sales. Parman thinks the clothing rental market is a “trickier” model, but predicts that the pre-loved fashion market will take off even more in 2022.
The used car boom has already arrived in the auto market, where soaring used car prices, up 31% since April, are fueling inflation. Usually around 2.5 million new cars per year are registered in the UK, but that number has dropped to 1.6 million in 2020, with a similar figure expected this year as a shortage of computer chips hits production. This shortfall is one of the factors in the price increase for the second-hand vehicle.
Ian Plummer, Commercial Director of the Automotive dealer market, says Covid has forced a reluctant industry to embrace the web. Buyers want to be able to do more of the online legwork, from appraising their current car to applying for finance. However, given the cost involved – in terms of expenses, a car is second only to a house for the average household – “seeing, touching, smelling” the vehicle you have chosen remains an important final step.
The uproar has been good, with the most recent figures showing a doubling in sales of electric vehicles. Almost 22,000 pure electric vehicles were registered in November, more than double the figure for the same month of 2020.
“A new electric vehicle has been launched every 10 days during 2021 and there will be even more cars next year,” Plummer said. “It’s a big change in the market: more sourcing, more marketing, creating more enthusiasm, which has been boosted by the fuel crisis. “
The rapid spread of the Omicron variant has been devastating news for in-store retailers as the number of shoppers dwindles on what is among the most important trading days of the year as Christmas approaches. With the Covid crisis seemingly far from over, the jury is still out on the long-term consequences for Main Street.
The flow of familiar names that failed before Covid has been accelerated by the lockdowns. Recent data from the British Retail Consortium shows that the number of empty stores has reached a record high of 14.5%.
The crisis has driven rents down, but corporate interest rates remain a big issue the government seems reluctant to tackle. There are glimmers of hope, however, with the same data pointing to declining vacancy rates in some areas as independents move in to fill the gaps left by old chain stores.
But there is, without a doubt, a more painful change to come. Hyman points to the £ 90 billion in non-food sales that have moved online over the past 20 years, a period when there has been no “significant” reduction in store space.
“The cost of selling something in a store is now much higher because you have a high fixed cost base and lower sales,” he says. “When this is all over, we will still have too many stores and too many websites.”