The impact of the 2020 lockdown on leading retailers and the whole retail industry was unprecedented (as was over-use of the word ‘unprecedented), leaving many businesses who had never even considered digital and eCommerce (or actively resisted it) under huge pressure to try and fill the void left by the closure of their high-street stores and those laying abandoned in shopping centres nationwide. Induced by the spread of Covid-19, entire towns & cities being closed down under government guidance left traditional bricks-and-mortar retailers feeling the pinch as they lost their footprint and all-important access to their customers.

Retailers closed due to covid 19

Unagile retail giants feel the pinch:

This impact was not just reserved for smaller, independent retailers; large-scale retail giants also felt the impact, ultimately even harder. Whilst most fellow “non-essential” retailers ploughed efforts into starting/supporting their digital and eCommerce operations, UK high street staple Primark continued its stance of avoiding digital channels, leading to zero-income during the lockdown, with the firm reportedly suffering “a £650 million loss for every month stores were shuttered”. All the while, having to deal with the overheads of running a traditional shop such as rent, rates, furlough pay and head-office/corporate salaries, not to mention paying their suppliers.

Primark closed refused ecommerce

Of course retailers like Primark have taken a deliberate stance on not taking on digital transformation, but it is very clear this has hurt them when the ‘worst case scenario’ has come to fruition.

The case for Digital Transformation in retail during lockdown:

We won’t dwell on the case for digital transformation. In an example like Primark’s, hindsight is certainly 20:20 and we are yet to see whether the pent-up demand will be released (and equate to the scale of the losses suffered whilst closed) as they reopen all of their 153 UK stores in the coming days & weeks. To those digitally-minded of us (like the Wonderful agency team!) refusing to embrace digital commerce seems utterly dumb-founding, but some firms are stalwart in their positioning, and have cited a multitude of reasons from distribution challenges & costs, to ethos and culture clashes. In this case, “if the shoe doesn’t fit”… well, they just won’t wear it.

There have been some clear success stories in eCommerce during lockdown. The most obvious to us is our client, Wahl, the industry-leaders in hair and barbering products took the decision to offer consumers access to their products in 2018, partnering with us to deliver a direct B2C eCommerce website, and start the centennial firm’s digital transformation journey. The establishment of this site could not have worked out better for them as male and female customers took to cutting their own hair at home due to the inability to visit their own hairdressers and barbers under lockdown restrictions – you can certainly imagine the record-breaking sales volumes achieved by this market-leader thanks in no small part to the accessibility of their digital retail platform.

Wahl ecommerce success during lockdown

Of course, this was almost a perfect storm for a company like Wahl, a brand which both sells a product high in demand; whilst facilitating unrivalled ease-of-access for their customers. However, this is not an isolated success story. Data from the IMRG Capgemini Online Retail Index demonstrated that online retail sales in the UK in May jumped by 32.7% year-on-year, the highest increase since March 2008. In fact, all categories, except for clothing (who needs new outfits when we’ve all been wearing shorts and tracksuit bottoms underneath the desk anyway?), saw an increase in online sales throughout the month of May.

The report shows a huge 162% year-on-year growth in home and garden sales as Brits look to home-improvement to pass the time (and to take advantage of the rather excellent weather the majority of the country has experienced during lockdown). In other categories, electrical goods & alcohol saw further year-on-year increases of 103% and 95% respectively. It wasn’t just May, since lockdown there has been a strong trend as sales of homeware, electrical products and alcohol all soared. The case for taking the leap to eCommerce is evidently strong, certainly in these categories.

Can eCommerce sustain growth after Covid-19 lockdown is lifted?

There was a marked global resurgence of eCommerce online shopping during the 3 months of high street lockdown, where it had previously plateaued a little. eCommerce businesses saw an average 126% rise in online revenue for the same period last year in the United States, with other notable revenue spikes coming from the Nordics (Denmark, Norway, Sweden, Finland, Greenland & Iceland), experiencing 166% year-on-year increase, and the wider European region experiencing a 115% increase. The data indicates that eCommerce will enjoy continued success once lockdown is lifted, reinforcing the importance of embracing online channels.

A study by Kantar looked at France, Germany & the UK (Europe’s 3 largest eCommerce markets) and concluded that lockdown shopping habits are very likely to continue once social distancing diminishes and high streets start to get back to normal. Kantar predict that eCommerce will further outperform traditional retail in what remains of 2020, with the study revealing that 33% of households believe their volume of online purchases will increase. This is predicted to increase for eco-friendly shoppers to around 40% and around 45% for households with children – a marked behavioural shift which retailers who did not embrace digital really have to contend with.

As a result of this, many brands who embraced digital during the lockdown now have the challenge of enticing shoppers back into their physical stores as they reopen, with conflicting messaging. Many businesses may want to consider encouraging a hybrid-approach, encouraging Click and Collect behaviours to bring online customers back in-store (retailers will be experiencing a subtle dip in sales as impulse purchases and in-store up-sell opportunities are missed, for example). In fact, one study revealed that 42% of UK consumers said they would now rather turn to ‘Click and Collect’ services for groceries and pharmacy products.

Click and collect sign

Savvy brands will have ensured that there is an inherent value-add to visiting their physical stores beyond being able to browse at leisure – and there has been an ongoing battle for attention in physical retail which was raging long-before the coronavirus pandemic. Retailers have been trying to make shopping more experiential for some time to alleviate the cannibalisation of sales to their online divisions. Some high streets and shopping centres have even hired entertainers, like these from The CEP, to make the social-distancing messaging a little less confrontational upon throwing open their doors:

The addition of in-store eateries and coffee shops, personal shoppers, peripheral entertainment and more all make shopping in physical stores an experience to enjoy rather than a chore to endure. The irony here is that these businesses will likely have to turn to digital marketing to promote this revived proposition and messaging.

Communication is key to continued success:

According to a survey of over 2,000 UK consumers (produced by retail-technology start-up Qudini), one of the major challenges for retail businesses moving forwards post-covid is building (or re-building) trust in the retail experience and in their brand as a whole, citing that: “Retailers in the UK should be looking to build customer confidence before reopening their stores while navigating through the Covid-19 pandemic”.

Brands that are poised to win as restrictions lift are those who evolved to embrace the digital world, whilst paying very close attention to their customers throughout the lockdown. They are brands which have communicated consistently, looked to take control of the conversation, filled voids, and built authority & trust despite the uncertainty.

Many of our clients have taken this stance, and we’ll be sharing some fantastic examples of how we’ve partnered and utilised digital marketing and technology solutions to maintain and grow trust, share of voice and share of market despite the challenges the pandemic have thrown in the way.

If this article has prompted you to consider digitising your model, but the challenge of eCommerce and Digital Transformation feels daunting; or you think there may be an opportunity to fuse the digital and real-world environments for your business, feel free to contact us for any advice, guidance, or to explore your own unique challenges.

Author: James Gray, Head of Digital: Experienced marketeer with a passion for all things digital. He nerds-out about data, using it to power the strategic thinking driving our online and offline campaigns.

 

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