There is no doubt that the coronavirus pandemic has changed the landscape of the retail sector. Social distancing regulations and civil anxiety surrounding the virus mean that physical stores do not offer the same browsing experience as we would usually expect. Meanwhile, a growing reliance on online shopping has been boosted by instructions to remain at home as much as possible.
The impact of COVID-19 and our new shopping behaviours have a profound effect on retailers. Changed buying experiences, falling and rising sales, and new consumer demands have defined an adverse year in retail. Here, we look at how customers and businesses have been affected by these changes, among the sport, beauty, and online sectors.
Rising and falling sales
The Office for National Statistics points to eight key industries within the retail sector to define its overall performance since the start of the pandemic. Only two industries managed to increase their sales in the immediate months following lockdown. Unsurprisingly, these were food stores and non-store retailing (otherwise known as businesses which do not utilise a traditional brick-and-mortar location). All other industries within the retail sector saw their figures drop the most in April.
While most industries have since recovered and now show high sales figures when compared to February, two still fall behind their historic performance. Clothing and fuel saw sales drop by 67.6% and 60.7% respectively. This is significantly lower than the 22.2% drop the entire retail sector experienced. The latest figures indicate that the pandemic’s impact is still damaging. In October, clothing was still 13.8% below February sales. Fuel was still 8.8% down.
The reasons for these fallings are a consequence of the impact of COVID-19 and of reduced demand. Limited social activities reduced the need for new clothing. Working from home, furlough, and further travel restrictions also reduced the need for fuel.
However, there are some promising industries within the sector. Household goods now achieve sales 14.4% above what they achieved in February, despite falling 50.5% in April. In fact, this recovery is seen across the board. Total retail in October achieved 6.7% more sales than it did in February. This indicates that the sector should remain optimistic for a stimulating recovery and boost when restrictions are eased, and normal consumer behaviour resumes.
A change in direction
The pandemic has forced many retailers to change the focus of their business. For the beauty sector, the past year has been damaging. Limited social interaction and the compulsory use of face masks in an indoor setting means that makeup and cosmetics have taken a hit. Google searches for beauty products between 2019 and 2020 saw a significant reduction.
Google searches for ‘lipstick’, ‘eye shadow’, and ‘fake tan’ all saw a reduction in searches between 2019 and 2020, with some products fairing worse than others. ‘Fake tan’ was the worst affected, with searches dropping by 19.3%. Meanwhile, ‘eye shadow’ fell by 15.7%, and ‘lipstick’ fell by 7.9%.
The impact of social restrictions has caused a considerable impact on our beauty routines, but for retailers of cosmetic products the reduction is searches and sales creates a difficult situation. With social restrictions and the closure of bars and clubs set to continue for a majority if not all of the first half of 2021, it is likely that demand for cosmetic products will be lower than usual.
However, consumers have not abandoned the beauty industry completely. Instead, they have prioritised other aspects of their beauty and health. Searches for ‘skin care’ increased by 62.9% in 2020 compared to the previous year. Staying at home, the public has focused attention on the health of their skin as opposed to using cosmetic products. Beauty brands have recognised this, promoting products that have usually not been prioritised. With social restrictions and mask-wearing regulation set to continue for the majority of 2021, beauty brands should look towards products that are accessible for consumers within this difficult but lucrative market.
An online boost
During the initial national lockdown, non-essential stores closed to prioritise the public health crisis. Unsurprisingly, consumers became more reliant on online shopping services as reflected in the rise of none-store retailing sales. But the lockdown changed more than the shopping experience, the limitations on public activities changed the demand for some products and services. For example, where social activities were limited, exercise was encouraged. In-store clothing retailers felt the full impact of COVID-19, but for online sport sales companies, sales saw a significant boost. Cycling saw increased popularity during lockdown, with many searching for more isolated ways to exercise and commute to work. For example, Google searches for ‘mountain bikes’ increased by 522% between February and April in 2020.
One bike sales company, Leisure Lakes Bikes, shared how their online activity grew during the pandemic. Demand for bicycles increased. In fact, visits to their website increased by 295% between March and April — only one month. By May, visits to their website had increased by 580% compared to March. The appeal of cycling during the lockdown was strong.
Time on their website also increased. Between March and April, the average time spent on the website increased by 57%. This shows that consumers are spending longer online, researching products and showing a real intention of making a purchase. One consumer survey found that 55% of customers prefer to visit stores before buying online. COVID-19 is directly responsible for changing this consumer behaviour.
This example reflects changing customer demands and the impact of selling online during the COVID-19 pandemic. Recognising the retail landscape, offering a product which consumers need, and offering an unchallenging buying experience will allow modern retailers to benefit during this period of uncertainty.
The retail sector is adapting to the changing views of consumers. Customers look towards stores to provide a safe and COVID-secure environment through hand sanitation stations, social distancing recommendations, and PPE equipment and cleanliness among staff. However, the coronavirus pandemic has not just pointed towards improved health awareness in businesses. Other aspects, including the environment and social contributions, are a focus of consumer choices.
The pandemic has created a sense of ‘mindful retail’. One consumer index suggests that during the pandemic, 55% of people are shopping in local stores in their community or are buying more locally sourced products.
In the same manner, 61% of consumers say they are making more environmentally friendly or sustainable choices when shopping. Even more, 89%, of these people intend to continue this habit when the crisis ends. This means that a majority of people intend to prioritise sustainability in the future through their shopping choices.
Retail businesses have responded to these changing behaviours, promising to ‘build back better’ in the future. While the pandemic may have impacted the affectability of sustainable strategies, there is a clear drive to improve the retail sector in the future in this respect. One study of the largest businesses in the retail sector shows this intention. Retail giants, including Dunelm, B&Q, and IKEA lead among companies that mention sustainability most through their social media and professional platforms. Measures may include recycling, limiting waste, and utilising renewable energy.
The impact of COVID-19 on the retail sector has been irreversible. Whether looking towards consumer behaviour, e-commerce rises, or company culture, retail businesses must reflect on their potential recovery in the future and understand how they can improve on their services going forward. As the pandemic recovery continues, businesses must adapt to the constantly changing landscape of retail.