By Lysa Campbell, CEO of Retail Marketing Group
As we begin to embrace more normality with the easing of lockdown restrictions, the retail sector is still trying to cope with the considerable upheaval it faced in 2020, whilst juggling steadily increasing demand both online and in-store. The future of retail remains uncertain in many ways. However, brick and mortar retail is seeing a comeback. Many consumers are still hesitant to forgo the social distancing rules that have been the norm for over a year, and data has shown that footfall is down a third on pre-pandemic levels.
Hybrid and blended retail has the potential to solve this issue, bridging the gap between online and physical retail and offering the best of both worlds.
Shifting retail habits
The shift to online retail began well before the outbreak of the pandemic. As recently as 2019, 13% of goods were bought online globally, up from 6% in 2014. The impact of the pandemic vastly accelerated a trend that was clearly in occurrence, and we saw the size of the e-commerce industry grow exponentially during the pandemic by the equivalent of three years of growth in just a few months.
Innovations such as Amazon’s fresh supermarket – where consumers can shop via their Amazon accounts and checkouts are eliminated – showcase that online and physical retail are already co-existing in many ways. The industry can expect to see many more of these types of stores in the near future. Amazon is not the only brand presenting an omnichannel approach to retail, with fashion retailer, Burberry, launching a virtual replica of its flagship Tokyo store this year. As well as navigating the store online this allows customers to purchase items from the 2021 spring/summer collection.
A blended future
Partnerships between different retailers and hospitality providers, to create multipurpose retail spaces, will see a multitude of operators collaborating as part of a blended retail experience. We saw the inception of this pre-COVID but it will likely be an accelerated trend as the decade progresses. Consumers are now after a more immersive and adaptable experience, which traditional brick and mortar stores don’t always offer.
New digital innovations will facilitate retailers rising to growing customer expectations. Initiatives like face-to-face video consultations and demonstrations will help to streamline the process and offer a new form of retail experience both from a consumer and vendor perspective. This will also help remove some obstacles that we may once have seen for product launches, like distance and mobility. Other innovations like Virtual Reality (VR) will enable customers to engage with content in a virtual environment.
One of the biggest unknowns about the retail sector’s future is the level of desire to return to stores as restrictions continue to ease. While there was an increase in retail spending in May, this was down in June indicating that many are still hesitant to return to the high street. June’s numbers also appear likely to have been impacted by the re-opening of the hospitality sector. If we are to see continued uncertainty in the months ahead, then it appears a blended approach will be required by many brands – both large and small – to try to curtail dwindling in-store numbers.
The fast-paced nature of retail developments means that the sector will need to evolve over the course of this decade. The pandemic has shown the need for innovation and its ability to adapt, with many brands shifting online at an unprecedented rate. While we seem unlikely to see a return to pre-pandemic high street habits, it is important to acknowledge the need for a blended approach as no two customers have the same retail habits or impulses. It will be intriguing to see how much of the traditional retail experience continues and how far technological innovations push the sector.
Global Banking & Finance Review
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