The global pandemic affected retail heavily. How will this sector recover from Covid 19 and how is it going to bring back customers to the stores?

We have analyzed a few of the latest researches on this topic and here are our insights to help you understand the future of retail after Covid 19.


The Scenario

This Summer European and North-American Countries went through the most acute phase of Covid 19.

These challenging times had a deep impact on our society, with repercussions that will likely last for a long time.

While the most severe measures, such as lockdown, are no longer mandatory in most of the countries, there are still some health rules to follow, like social distancing.

All the experts agree that the only way to avoid another spread of Covid 19, besides using safety devices like face masks, is to respect safety distances.

This decision has obviously consequences on our daily lives and it also affects how we shop and behave inside a store.

A good starting point is a statistic by GfK: 63% of Italians still wish to visit a physical store for a purchase.

This is an important statement: although ecommerce popularity has risen because of lockdown, the need for physical retail is still strong.

Traditional stores are facing a difficult task: not only they need to offer a satisfying shopping experience but they also must guarantee customers’ safety.

This is a sensitive issue: the above mentioned research by GfK also states that almost 70% of customers consider safety as their top priority while they visit a retail shops.

This is a new factor retailers need to consider, as they are worried that the use of safety devices (gloves, facemasks) will make the shopping experience less enjoyable for customers.

Shift to Online Grocery Shopping

With most of the world population still unable to leave their houses, the need for goods delivers right to their doorstep has risen considerably.

While e-commerce has become more and more popular during the last years, the COVID pandemic has reinforced a trend inside this trend: online grocery.

While most people consider this solution temporary, it’s likely that a large stake of customers will stick to this behavior, as a few researches confirm.

According to Euromonitor International’s 2020 Digital Consumer Survey, as example, last March 51% of the people who had access to Internet in South Korea bought food and beverage through their smartphone.

A Waitrose‘s research shows that one in four consumers now buy food and essentials at least once a week online in UK. According to a poll by The Guardian, 20% of the people shopping groceries online hadn’t considered it before:

Contactless Payment

If you have visited a shop since the end of lockdown, there is a good chance that you may have noticed a sign saying that contactless payments are always preferred.

This suggestion is based on a safety concern: all the major organizations such as WHO and the national institutes of health agree that that the virus remains stable for several hours on surfaces.

This means that if the shopkeeper doesn’t sanitize the POS after each use, the risk of spreading the virus can rise.

The use of a contactless payment instead implies that a customer should not touch any surfaces.

Mastercard acted quickly in response: the company decided to raise the limit for a contactless payment, in order to remove the need for a Pin.

Anyway the company itself declared that 75% of transaction in Europe are already contactless.

According to an analysis run by Forbes, this consumer habit will likely stick for a long time, as the measures of social distancing will still be necessary.

This is also confirmed by a research by Dynata, stating that globally almost one third of the customer who doesn’t use a contactless payment method will likely get one soon.

Store Pickup or BOPIS

The retail vocabulary calls it BOPIS (Buy online Pickup in Store): a new solution to create a mix of e-commerce and traditional shopping. It consists in choosing and purchasing the goods online and then driving to the store to pick them up.

This new idea of shopping experience, despite an interesting growth rate in the last few years, had struggled to become a mainstream trend, and was mostly popular in retail powerhouses such as Target or Walmart.

The reason why costumers choose this option, according to a 2019 survey by Coresight Research, is to avoid delivery fees and have access to the required goods faster.

What was impossible to foresee was the increasing popularity of BOPIS in the post-COVID commerce ecosystem, as it allows the customer to avoid unnecessary contacts in the shop and gives the chance to fulfill more efficiently the online orders to non-essential shop that had to close during lockdown.

Data seem to support this statement: Adobe Analytics claims that last April in-store pick up has risen by no less than 200% since last year, and 59% of consumers interviewed by Retail Dive would prefer BOPIS, due to safety concerns.

The biggest question about this trend is the same for all the others described in this article: after the pandemic is over, will it last?

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Opinions on BOPIS

Retail Dive has gathered the opinion of several experts, in order to find out their thoughts.

Interviews had mixed reactions: some consider in store pickup as a “win win” occasion for both customers and retailers, as it is convenient and cost effective.

Others went as far as saying that this service has a huge potential and Covid 19 only accelerated what was meant to happen.

On the other hand, other experts claimed that an excessive spread of BOPIS could be dangerous for retailers, as it takes away the chance to have impulse purchases and prevents costumers to physically discover the store.

Conclusions

Trends such as online shopping or BOPIS were already growing at an interesting rate, but obviously the pandemic accelerated the whole process.

In the words of James Bailey, executive director of Waitrose, what would have previously been a gradual upward climb in demand has, with the outbreak of Covid-19, turned into a trajectory more reminiscent of scaling Everest.

The most relevant data, as told by KPMG, is that not only retail has been heavily impacted, but it’s also very likely that it will take a long time for customer behavior to normalize, even years.

Due to the sudden changes in the life everyone, adopting solutions such as e-commerce or BOPIS can be one of the ways the help retailers to continue to run their business.

Nevertheless, the one thing that all sources agree on is that these changes must be adopted quickly.