Abandoned Stores, Fewer Choices… Has Shopping Changed Forever? | Retail sector

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After nearly two years of disruption, Covid-19 has changed the way we shop forever. It changed not just what we buy, but how we buy it. Big purchases involve clicks, not shopping trips, and remote work has transformed the home décor market into a new and fast fashion.

It also signals the end of consumers’ overwhelming choice, analysts say, as gaps on shelves and long delivery times for items like cars and sofas have become a frustrating reality of life.

Changes in lifestyle due to health or environmental concerns also help bring new services to life. Investors are pouring billions into express grocery delivery, while buying used clothes and renting furniture is entering the mainstream. On the high streets, cheaper rents are beginning to attract independent stores.

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

Grocery shopping

The pandemic has caused major disruptions to the £212 billion British grocery industry. The return of the weekly shop during stricter lockdowns looked as if it saved supermarkets from a midlife crisis, only for an army of express grocery delivery companies, such as Getir, Gorillas and Jiffy, to walk away with the promise of grocery deliveries in less than half an hour.

The IGD, the trade body for the food and consumer goods industry, says so-called express trade has “exploded” onto the scene and is now a “channel in itself”. She estimates 13% of UK shoppers now use these services, with sales reaching £1.4 billion this year and on track to double in five.

The health crisis has created the kind of market conditions where people are “willing to pay delivery fees for a 20-pound, 15-minute delivery experience,” says Brian Roberts, an analyst at Shopfloor Insights, although he adds: “Time will tell if this The models will be sustainable.”

Expanded online services offered by the major chains have also managed to attract millions of new customers during the pandemic, but with inflation soaring to its highest level in 10 years, the sands are turning again, with discounters like Aldi and Lidl potential future winners. Months where Brits are looking for cheaper stores.

There may be more ways to shop these days, but supply chain problems in the background have prompted major grocery brands to take the discount book paper and reduce their ranges to become more efficient.

“The abundance of options we had is going to change,” says Richard Wilding, professor of supply chain strategy at the Cranfield School of Management.

“You used to be able to buy 60 different types of pasta in the supermarket: Then, during the pandemic, manufacturers started rationalizing their ranges so that suddenly you could only have 20,” he says. “Having new and interesting products has traditionally been a way to create consumer demand, but companies are basically saying ‘we have to focus on the higher-margin stuff’.”

Express grocery deliveries by couriers like Jiffy are an emerging threat to supermarkets. Photography: Mark Chivers working from home

The shift to working from home has had such a profound impact on the way we live that it has become a hyper-retail trend in its own right. It has shifted spending priorities, with money usually spent on outdoor holidays or hopping on home furnishings and renovations.

Being at home 24/7 has also accelerated the shift to online shopping. It took online sales eight years to double their share of spending to 20%, but in just nine months during the pandemic, that number reached 36% last year. The easing of restrictions this year has brought it back to 26%.

“Working from home has changed the style of shopping and the pattern of ordering,” says Richard Hyman, independent retail analyst. Markets such as fashion, food, beauty, and household items have changed shape, but the question is: have they risen to a new and permanent position? It’s still very fluid because no one knows what percentage of people will continue to work from home.”

The consumer spending profile has changed dramatically: For example, shoppers spent an additional £503m in DIY stores this year, according to figures from retail data firm Kantar. The British also took on the new amusement: 1.2 million new gardeners spent an additional £51 million on plants and related tools.

“Not everyone’s job is at home, but the way we socialize and shop in general is more home-centric,” says Kantar’s Joanna Barman.

“We travel less on the weekends for shopping trips or eating out. So we are more likely to visit local or independent stores than before.”

She adds, “A lot of people have been stripped of their looks and invested in the look of their home, so it’s Instagrammable and looks beautiful in the background when you’re on your phone or video call. They’re investing a lot more in their home and you could argue we’re seeing some ‘quick home’ trends.” Appear. “

fashion

Britons have replaced style with comfort during the pandemic: saw an 88% increase in pajamas sales last year. The prolonged closure of supermarkets has forced shoppers to buy the clothes they need online and there may be no going back.

Data company Retail Economics estimates that half of the £51bn spent on apparel this year was bought on websites. Come 2025, you think that number will be two-thirds of the total. This is already the case for electrical appliances, which has been one of the fastest-growing markets online.

“What is clear from the pandemic is that as a nation we have been able to adapt and transform our behaviours, sometimes overnight,” Barman says. “There aren’t a lot of policies that say we shouldn’t socialize but people have really pulled back from eating out. We are driving a lot of change in our habits and the longer it stays on, the more likely it will last.”

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

Marks & Spencer, the UK’s largest clothing retailer, is running a small trial to test the demand for rental dresses and coats – a more advanced trend in furniture, with the likes of John Lewis renting out sofas, sideboards and desks.

As always, teens interested in fashion get there first and are already spending their money on second-hand clothing sites like Depop and Vinted, which report huge increases in sales. Barman believes the clothing rental market is a “more sophisticated” model but expects the much-loved fashion market to take off in 2022.

Sales are up on used clothing apps like Vinted and Depop. Photo: Photonstop / AlamyCars

The used-car boom has already reached the auto market, where used-car prices, up 31% since April, have fueled inflation. Typically around 2.5 million new cars are registered annually in the UK, but that number fell to 1.6 million in 2020 with a similar number expected this year due to a shortage of computer chips affecting production. This shortage is one of the factors that led to the high prices of used goods.

Ian Plummer, Commercial Director of Auto Trader Market, says Covid has forced a reluctant industry to embrace the web. Buyers want to be able to do more of the legal work online, from getting an appraisal of their current vehicle to applying for financing. However, given the cost involved – in terms of spending, the car is second only to the house for the average household – “seeing, touching, smelling and smelling” your vehicle of choice remains an important last step.

There has been some upside to the turmoil, with the latest numbers showing electric vehicle sales doubling. Nearly 22,000 pure electric vehicles were registered in November, more than double the number in the same month in 2020.

“A new electric car is being launched every 10 days during 2021 and there are more cars coming next year,” Plummer says. “It’s a major market shift: more supply, more marketing, more excitement, spurred by the fuel crisis.”

Shops

The rapid spread of the Omicron variant has been devastating news for in-store retailers as numbers of shoppers rotate on what are considered among the most important trading days of the year in the run-up to Christmas. With the Covid crisis seemingly far from over, the jury is still out on the long-term consequences that will be on Main Street.

The influx of household names that failed before Covid has been accelerated by the lockdowns. The latest British Retail Consortium data shows the number of empty stores at a record high of 14.5%.

The crisis has brought down rents, but appalling business prices remain a huge problem that the government seems reluctant to deal with. There is a glimmer of hope, however, as the same data suggests vacancy rates are declining in some areas, as freelancers move to fill voids left by defunct chain stores.

But there is, without a doubt, an even 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 “measurable” decline in store space.

“The cost of selling something in a store is now much more expensive because you have a high fixed cost base and fewer sales,” he says. “When all of this is over, we still have too many stores and too many websites.”

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